Prices for Russia's Urals crude destined for India's west coast reached $98.93 a barrel on Friday, a level not seen since Moscow altered its export flows to India after the invasion of Ukraine in early 2022.
The $98.93 figure reflects freight and other shipping costs bundled into the delivered price. Market data from Argus Media shows the rise in the landed cost came after the United States broadened the scope of a permit that permits countries to buy Russian crude.
Alongside the headline price move, the discount for Urals crude shipped to Indian ports tightened to $4.80 a barrel against the global benchmark Dated Brent on Friday. That gap is the narrowest observed in more than four months, according to the same data.
Traders and analysts pointed to a broader pattern of higher global oil prices as a backdrop for the jump in Urals' delivered levels. The recent escalation in oil markets is associated in market reporting with the ongoing war in the Middle East, which has contributed to upward pressure on crude benchmarks.
Context and market mechanics
Because the price reported includes shipping, changes to both the underlying crude price and logistics costs can influence the landed number paid by buyers on India’s west coast. The U.S. decision to widen the permit for purchases of Russian crude is cited in market data as a proximate trigger for increased buying interest, which coincided with the narrowing of the discount to Dated Brent.
Immediate market reaction
Data shows the narrowing of the Urals discount to Dated Brent to $4.80 a barrel, a four-month low, took place the same day the delivered price hit $98.93. The price movement occurred amid already heightened global oil prices tied to regional conflict in the Middle East.
Key takeaways
- Urals crude delivered to India’s west coast reached $98.93 a barrel, including shipping costs.
- The U.S. widened a permit allowing countries to buy Russian crude, which coincided with the price rise.
- The discount to Dated Brent narrowed to $4.80 a barrel, the smallest gap in over four months.
Impacted sectors
- Energy markets and oil traders, due to shifts in crude pricing and basis differentials.
- Shipping and logistics, as delivered prices incorporate freight and port costs.
- Refining and fuel markets, which respond to changes in feedstock prices and differentials.
Risks and uncertainties
- The ongoing war in the Middle East, which market reports link to higher global oil prices and could sustain volatility in crude benchmarks.
- Regulatory or policy changes affecting the permit regime for purchasing Russian crude, which have already influenced buying flows and pricing.
- Logistics and freight variations, since the reported price includes shipping and movements in freight costs can affect the landed price paid by buyers.
Reporting is based on market data that identified the delivered price, the narrowed discount to Dated Brent, and the timing of a U.S. permit change; the linkages in market behavior are indicated by that data. Additional developments could change these dynamics, but they are not detailed in the source data underlying this report.