Urals Trade Below Cap, Opens Door For Western Shipping, Insurance

The average price for Russia's Urals oil blend was trading below the G7/EU oil price cap of $57.49/bbl between 15 Nov and 14 Dec, meaning western shippers and insurers could still provide services without facing sanctions.

• The Urals price for delivery from the Black Sea port of Novorossiisk on a FOB basis is currently $48.69/bbl and $57.28/bbl on a CIF basis, according to Reuters data.
• The Russian Finance Ministry's Urals price include the cost of insurance and freight (CIF), which is higher than the FOB level.
• The benchmark price from Urals dropped from $71.10/bbl in October, which was due to a general downward trend in crude benchmarks, and not due to the imposed oil price cap, according to the Russian Finance Ministry.
• The Ural benchmark trading below the $60/bbl G7/EU price cap means western shippers and insurers in countries that have imposed sanctions on Russia over the Ukraine conflict would still be able to provide services to cover shipments of Russian crude without fear of being sanctioned.
• However, some reinsurance companies have voiced to cease any cargo business with Ukraine or Russia by the end of the year, which could increase the risk for owners and first-tier insurers.