With the European Union (EU), G7 countries and Australia banning the provision of insurance, brokerage and transportation services for Russian oil sold for $60 or more, India cemented its title as Moscow’s largest oil customer.
According to the information compiled by Reuters from sectoral data and oil market experts, India, which bought 53 percent of Russia’s Ural crude oil in November, increased this rate to 70 percent in the interval when the ceiling price pressure of Western countries began. The increase was due to Russia’s sale of this type of oil, which was sold to Europe before the Ukraine war, at a price well below $60.
Before the war, India did not prefer this type of oil, which was transported by tankers through the Suez Canal in about two weeks.
The Financial Times pointed out that although Russia had previously announced that it would not sell through the ceiling price application, it was willing to sell for less than $60.
Matthew Wright, an analyst at data firm Kpler, said there was no significant drop in Russia’s oil exports after the December 5 ceiling:
After the first week of the price ceiling, there was a partial decrease and the second week seems to be low. However, it is still too early to reach a proper conclusion for the medium-term effect.
Turkey is one of the big customers
According to Refinitiv Eikon data, there are 4 main customers of Ural oil in the range: India, Bulgaria, China and Turkey.
India bought at least 2 million tons (35.6 million barrels) of Ural oil this month.
Despite being an EU member, Bulgaria, which is excluded from sanctions against Russia, bought about 800 tons of Ural oil this month. While China and Turkey buy 140 thousand tons (approximately 2.5 million barrels) of Ural oil, experts expect oil flow to China from this source to increase.
In the market, the price of Brent oil, which is the international pricing scale, was around 81 dollars in the week of 11-17 December.
Ural oil is obtained by blending the oils of the Ural-Volga region and West Siberia.
Russia also sells oil from the East Siberian region, known as ESPO, through the Port of Kozmino to China and other Asian countries. This type of oil can be sold a little more expensive than Brent oil, as the transportation time and distance are very short.
According to the Wall Street Journal, Russia’s cost of producing a barrel of oil is around $40. The oil revenue he expects to avoid a budget deficit is $70 per barrel.
The opinions expressed herein are the author’s and not necessarily those of News2Sea.
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