Russian Urals oil prices rise amid Gulf shipping threats

The price of Urals crude from Russia has surged as the conflict involving Iran reshapes global energy markets. With shipping from Saudi Arabia and the Saudi Arabian Oil Company hampered by threats to Gulf maritime routes, market attention has pivoted back to Russian exports. Urals oil was offered at approximately $76 per barrel on a free on board basis on Monday, a significant jump from the $45 price point seen only two weeks ago. Calculations suggest the value of a cargo loading from the Baltic port of Primorsk has risen to $54 million this week, compared to $35 million in February. This price action follows a period earlier this year when Russian sellers struggled with nearly negative export margins. In a historic shift, Urals crude for delivery to India is now selling at a premium relative to the Brent Crude Oil benchmark. This development comes despite ongoing international efforts to cap the price of Russian seaborne oil. Market activity was further supported after the United States issued a temporary waiver last week, allowing Indian refiners to process Russian crude that was already at sea. While revenues are climbing, exporters are grappling with a sharp rise in operational overhead. Traders noted that freight costs for the route between Russia's Baltic ports and India have reached between $22 million and $23 million per vessel. This represents a near doubling of rates since early February, driven by a scarcity of available tankers. Similar trends are observed at the Black Sea port of Novorossiysk, where freight costs to India have also climbed above $20 million following the resumption of loadings. The broader energy market remains volatile, with Brent prices hitting a peak of $119 per barrel on Monday, the highest level since mid-2022. These gains were spurred by supply reductions from major Gulf producers, though the rally cooled slightly after U.S. President Donald Trump predicted the regional conflict could reach a conclusion sooner than expected.