Russia’s Urals crude oil price plunged below the $60 per barrel limit imposed by Western nations as the Brent price weakened following the Iran-Israel ceasefire, Reuters calculations based on traders’ data showed on Thursday.

Brent prices jumped last week to reach $78.85 per barrel on June 19, as Israel and Iran traded airstrikes, raising fears of supply disruptions. But they have now lost more than $10 per barrel of their value since the ceasefire was agreed on Tuesday.

The U.S., other Group of Seven countries and Australia imposed the price cap in late 2022, seeking to reduce Russia’s revenue from seaborne oil exports as part of wide-ranging sanctions imposed over Moscow’s invasion of Ukraine.

Under the terms of the cap, suppliers of Russian oil are only able to use Western services such as shipping and insurance when Russian crude trades below $60 per barrel.

A new European Union proposal would impose a lower price cap of $45 per barrel, further complicating oil trade for Moscow.

Urals oil cargo loadings from Russia’s Baltic and Black Sea ports were priced around $55-56 per barrel on Wednesday on a free-on-board basis, which excludes charter costs and insurance, according to Reuters calculations. That is some $10 per barrel below last week’s estimates.

Reuters calculates Urals oil prices based on the previous business day data.

Russian Urals oil has been priced below $60 per barrel since April 2, except for a jump above the price cap level last week on the Brent rally.

The Urals oil price is linked to the Brent price, which means it depends on the change in the benchmark’s value.
Source: Reuters