India and China snap up Russian oil in April above 'price cap'

India and China are reportedly buying the majority of Russian oil in April at prices above the Western price cap of $60 per barrel, according to Reuters. This has helped the Kremlin earn stronger revenues despite Western attempts to reduce funds for Russia’s military operations in Ukraine. India accounts for over 70% of seaborne supplies of the grade so far this month, while China accounts for about 20%. Meanwhile, lower freight rates and smaller discounts for Urals against global benchmarks have nudged the daily price of the grade back above the cap earlier in April. Keywords: Russia, oil, India, China, Western price cap.

India and China have snapped up the vast majority of Russian oil so far in April at prices above the Western price cap of $60 per barrel, according to traders and Reuters calculations.

That means the Kremlin is enjoying stronger revenues despite the West's attempts to curb funds for Russia's military operations in Ukraine.

A G7 source told Reuters on Monday the Western price cap would remain unchanged for now, despite pressure from some European Union countries, such as Poland, to lower the cap to increase pressure on Moscow.

The advocates of the cap say it reduces revenues for Russia while allowing oil to flow, but its opponents say it is too soft to force Russia to backtrack on its activities in Ukraine.

The latest data from Refinitiv Eikon suggest Russian Urals oil cargoes that loaded in the first half of April are mostly heading to India's and China's ports.

India accounts for more than 70% of the seaborne supplies of the grade so far this month and China for about 20%, Reuters calculations show.

Meanwhile, lower freight rates and smaller discounts for Urals against global benchmarks nudged the daily price of the grade back above the cap earlier in April from a period of trading below.