Russian Urals crude oil is now trading at a premium to the benchmark Brent crude for the first time since the onset of the full-scale invasion of Ukraine. Reports indicate that the price of Urals reached $121.65 per barrel on the western coast of India, marking the highest level since late February 2023.
The ongoing conflict in the Middle East has contributed to a reduction in global oil supply. In response, the United States has permitted buyers to purchase Russian oil stored on tankers at sea without the risk of sanctions, leading to renewed interest from major Indian refiners such as Indian Oil Corp. and Reliance Industries Ltd. These companies have reportedly acquired tens of millions of barrels from Russia, thereby bolstering Moscow’s revenues in the fifth year of its war against Ukraine.
Currently, the price of Urals significantly exceeds the average of $59 per barrel projected in the Russian budget for this year. Even oil that has not yet been unloaded at Russian ports has seen prices rise to an average of $89.58, the highest since July 2022.
According to Bloomberg, despite the increase in oil revenues, Russian authorities are planning to reduce budget expenditures to mitigate the deficit and avoid increasing borrowing. This comes as global oil prices surged following the commencement of U.S.-Israeli operations against Iran, which has seen Iranian forces block the Strait of Hormuz, a critical route for oil shipments from the Gulf countries to the global market.
As of March 24, Bloomberg reported that Russia’s oil revenue has returned to levels seen in March 2022. The average daily income from oil exports in March 2023 has doubled compared to the beginning of the year, rising from $135 million to $270 million.
Russian Urals oil is trading at a premium in India for the first time since the invasion of Ukraine, reflecting shifts in global oil supply dynamics. The U.S. has allowed purchases of Russian oil, spurring interest from Indian refiners and increasing Moscow's revenue amid ongoing budgetary adjustments.