US sanctions push Urals oil prices down for India, driving record tanker freight rates

The US sanctions against Russia's largest oil exporters, which came into effect on November 21, simultaneously collapsed the price of Urals for India (its largest importer) and sharply raised rates for supertanker freight on key routes, Bloomberg writes.

Pros in words according to the agency's sources, Indian refiners are now being offered Russian Urals at the biggest discount in at least two years – up to minus $7 per barrel compared to Dated Brent. Before the sanctions, the discount was only about $3.

In parallel demand for alternative oil from the Middle East and the United States pushed rates for VLCC supertankers to their highest levels since 2020 – almost $137,000 per day, up 576% year-on-year.

The increase in rates has also spread to smaller tankers such as Suezmax and Aframax.

In addition, even tankers that normally transport jet fuel and diesel are switching to crude oil transportation in record numbers to achieve higher margins.

• On November 12, President Volodymyr Zelenskyy said that Russia in 2025 may lose at least $37 billion of oil and gas revenues due to sanctions and Ukrainian long-range strikes.
• On November 13, the price of Russian Urals oil fell to $36 – minimum since March 2023.