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As the price of Russia’s flagship crude fell below the $60 per barrel price cap and international benchmarks slumped, India expects to increase its purchases of Russian oil, an anonymous senior government official in India told Reuters on Friday.
The price of Russia’s flagship crude, Urals, has dropped below the $60 per barrel price cap for the first time in months amid plunging international benchmarks.
The price of Urals crude loaded from Russia’s Baltic Sea port of Primorsk fell to $56.15 a barrel, while the price of Urals at the Novorossiysk port in the Black Sea slumped to $56.55, Bloomberg reported on Thursday citing data from Argus Media. The data is used to inform G-7 policy on the price cap.
Urals crude had been trading above the price cap since July, and reports have emerged that the West is considering toughening up the sanction enforcement on evaders of the price cap on Russian oil, almost none of which has recently traded below the ceiling of $60 per barrel.
The recent rout in the oil market has driven Urals below the price cap, for now.
Last month, the U.S. sanctioned several maritime companies and three vessels for transporting Russian oil above the G7-set price cap. One of the tankers, NS Century, was reportedly headed to India when it was sanctioned.
At the end of last month, reports emerged that India was still considering whether to allow the now-sanctioned tanker carrying Russian oil to approach and dock at one of its ports—a sign that the U.S. clampdown on Russian crude trade could limit India’s ability to buy and import cheaper oil.
The Indian official refused to comment for Reuters on the likely destination of NS Century, but said that India doesn’t expect the sanctions to impact Indian purchases because of a sufficient number of available tankers on the market.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com