By Nidhi Verma
NEW DELHI (Reuters) – The average price of Russian oil delivered to India in August rose to the highest level since G-7 nations imposed a price cap in December last year, Indian government data showed, indicating narrowing discounts.
India received Russian oil at an average price of about $86 per barrel, compared to $68.09 per barrel in July and $94 in August 2022 before the cap was imposed, according to Reuters’ calculations based on the latest data posted on the Indian Trade Ministry’s website.
Refiners in India largely buy Russian oil on a delivered basis, with sellers arranging for shipping and insurance.
The Western price cap on Russian oil, aimed at curtailing Moscow’s revenue, allows buyers to use Western services such as shipping and insurance in the event that crude trades below $60 per barrel at Russian ports.
The data does not specify freight, insurance other charges paid by Indian refiners but is significantly higher than $60 per barrel price cap.
U.S. Treasury Secretary Janet Yellen on Wednesday said a G7-led price cap on Russian oil had sharply reduced Russian revenues over the past 10 months while promoting stable energy markets.
Russian oil is mostly trading above the $60 per barrel cap since mid-July, as discounts narrowed due to output cuts by OPEC+ producers, including Saudi Arabia and Russia.
The average cost of Russian oil in August was lower than that from Iraq and Saudi Arabia. The price of a barrel of oil from Iraq and Saudi Arabia in August averaged $88.52 and $102.24, respectively, the data showed.
Russia’s flagship Urals crude oil blend traded at $83.80 per barrel on average in September, Russia’s Finance Ministry said earlier this month, with the price remaining comfortably above a Western price cap.
India depends on imports to meet more than 80% of its overall oil needs and rarely bought Russian oil in the past due to high transportation costs.
The country has emerged as the biggest buyer of seaborne Russian crude since Moscow’s invasion of Ukraine more than a year ago.
(Reporting by Nidhi Verma; Editing by Sharon Singleton)