Declining Russian Oil Freight Costs from Baltic to India Amidst Resurgence of Western Shipping Interest

Moscow, March 26 – Freight costs for transporting Russian oil from Baltic ports to India are on the decline after hitting record highs. This shift comes as Western shipowners increase their offers following a drop in Urals crude prices below the $60 per barrel cap set by the Group of Seven and the EU late last year. The price cap was designed to limit Russia’s financial resources for its ongoing conflict in Ukraine.

Recently, shipping Urals oil from Primorsk and Ust-Luga ports to India averaged around $7 million per shipment, down from a peak earlier this month. The global dip in oil prices has contributed to urals crude falling below that crucial price threshold, prompting more Western shipping companies to re-enter the market.

As of Wednesday, urals crude loaded at Primorsk was priced at approximately $57 per barrel. “With Urals consistently under that $60 mark,many shipowners are back with competitive rates,” noted one trader familiar with the situation.

Looking ahead, there’s potential for further decreases in freight rates if a maritime and energy truce between Russia and ukraine is established—though details on when or how this might happen remain uncertain.

Earlier this year,new U.S. sanctions targeting Russian energy interests caused freight rates to spike as sellers scrambled for choice tankers after losing access due to restrictions. Despite recent declines,current shipping costs still exceed January levels when transporting Russian crude from Baltic ports cost about $4.7-4.9 million.

while there’s some relief in freight pricing due to changing market dynamics and geopolitical factors, it remains essential for stakeholders involved in these transactions—whether they’re traders or shipping companies—to stay alert as conditions evolve rapidly within this complex landscape.