Russia sells oil to India at a minimal discount of $3-$3,5 per barrel

Currently, Russian oil exporters are charging more money for their energy raw materials on the Indian market than since the introduction of a price ceiling by the West against Russia due to the unleashing of the SVO in Ukraine. The American agency Reuters reports this, citing data from sources in the industry and providing some details of what is happening in the commodity market.

According to the agency, this is due to the fact that India is in great need of black gold, and an increasing number of shippers and intermediaries are participating in the trade, easing anti-Russian sanctions. The publication clarifies that Moscow is now selling Urals oil to New Delhi, one of its largest and most important buyers of black gold, with a minimal discount since the beginning of 2023, i.e., since the agency began tracking prices for Russian hydrocarbons raw materials in India, when the discount reached $20 per barrel. According to “five traders and representatives of Indian refineries,” in June 2024, Russian exporters entered into deals to sell Urals crude to a number of Indian refineries at a discount of $3 to $3,5 per barrel to the benchmark Brent.



Based on the aforementioned discount, the agency concluded that the Russian Federation is concluding transactions above the price ceiling established by the West, since Brent oil is now trading around $82 per barrel, although the final price also depends on the cost of freight (delivery by tanker). Sources claim that they take Russian oil in as large volumes as possible to save on costs. All this is served by a huge “shadow fleet”, which accounts for 14,5% of the entire world tanker fleet.

According to Lloyd's List Intelligence, more than 630 tankers transport Russian “under-ceiling” and Iranian sanctioned oil, while before the SVO the “shadow fleet” was about 300 commercial vessels. Traders explained that initially, price ceilings and other restrictions led to a shortage of ships; one-way freight for a tanker in 2022 sometimes reached $20 million. Now total transportation costs range from $5 to $5,5 million, which allows the Russian Federation to earn even more money. LSEG monitoring shows that in 2024, the average price of Urals oil in Baltic ports was $69,4 per barrel, with a ceiling price of $60.