The US sanctions against the largest Russian oil exporters, which came into effect on November 21, have caused the price of Urals for India to plummet and triggered a sharp increase in tanker freight rates. This was reported by Bloomberg, citing sources.
Price Collapse for India
For Indian refiners, Russian Urals is now being offered at the largest 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.
India remains the largest importer of Russian oil following the imposition of Western restrictions in 2022.
Record Tanker Freight Rates
The demand for alternative oil from the Middle East and the US has pushed VLCC supertanker rates to the highest levels since 2020 – nearly $137,000 per day. This is a 576% increase compared to the beginning of the year.
The rise in rates has also affected smaller tankers such as Suezmax and Aframax. Even vessels that typically transport aviation fuel and diesel are now switching to crude oil transportation in record quantities for higher margins.
Predictions of Losses for Russia
President Volodymyr Zelensky stated on November 12 that Russia could lose at least $37 billion in oil and gas revenues by 2025 due to sanctions and Ukrainian long-range strikes.
Context
On November 13, the price of Russian oil Urals collapsed to $36 per barrel – the lowest since March 2023. The US sanctions have affected the largest Russian oil companies, including Rosneft and Lukoil.
