Traders have reported that tightening supply of crude oil and higher international prices have pushed the price at which Russia’s crude is sold to India up by about $20 per barrel above the G7 price ceiling of $60.
Urals, the Russian flagship crude grade sold by Moscow to India at nearly $80 a barrel.
If the EU and G7 set a price cap of around 30%, then the Russian crude oil shipments to tier countries outside the EU will be about 30% higher.
Reuters and traders' calculations show that Indian refiners paid nearly $80 per barrel on Thursday for free-on-board (FOB), Urals cargoes due to be loaded from Russia's west ports on the Baltic Sea this October.
Urals from Russia are more appealing due to the tightening of global supplies, particularly crude oil from the Middle East, which has high diesel yields.
Due to the discount that Russian grades are trading at relative to Brent, the international benchmark.
Urals, which is much more expensive than the first half this year, is very popular in India, where diesel fuel is the most consumed.
Other grades of Urals, if they are available, will cost more than Urals.
Prices of Urals are rising again. Alternatives are more expensive and difficult to find.
Reuters spoke to a trader who knows the Russian oil markets.
Since July, the price of Urals has been well above the G7 ceiling.
Average cost of $74
The price of a barrel of oil in August was slightly lower than August 2022 but still higher than the G7 cap of $60 a barrel and the average for July of $64.37 per barrel.
The Russian Finance Ministry released data in early September.
The average price for Urals between January and August of 2023 was $56.58 a barrel. This compares to $82.13 per barrel during the same period in 2022.