Russia’s Urals crude oil prices at Baltic Sea ports have remained above the European Union’s new floating price cap of $44.10 a barrel since its introduction on February 1, traders said and LSEG data showed.
The cap allows European companies to continue providing shipping, insurance and other services for Russian cargoes provided that the oil is sold below the price cap.
LSEG data shows Urals free-on-board (FOB) prices at Primorsk port have been above $44.10 since February 1. Prior to the cap change this month the price of Russian oil had held below the previous limit of $47.60 since November, the data showed.
However, winter weather and more sanctions on Russian oil shippers have pushed up freight rates for oil deliveries, weighing on the grade's price, traders said, which could push prices below the new cap.
Freight costs for Urals loading in February at the Baltic ports of Primorsk and Ust-Luga for transport to India rose to $9 million for Aframax tankers from about $8 million per one-way voyage in November and December last year.
On Wednesday, the latest available assessment data showed the Urals oil price for cargoes loading at Primorsk was at $44.14 a barrel, only slightly above the new price cap.
(Reporting by Reuters Editing by David Goodman)
