Published by Global Banking & Finance Review®
Posted on March 6, 2026
3 min readLast updated: April 1, 2026
Add as preferred source on GoogleFor the first time ever, Russian Urals crude is trading at a $4–5 per barrel premium over Brent on a delivered basis to Indian ports, driven by surging demand amid the Iran war and U.S. sanctions relief. Freight costs, however, are rising sharply, weighing on seller margins.
March 6 (Reuters) - Russian flagship Urals oil is selling at a premium to the Brent international benchmark at delivery in Indian ports for the first time ever, fuelled by rising demand due to the Iran war, traders said on Friday.
The U.S.-Israeli war against Iran, which began a week ago, has choked the Strait of Hormuz, the main route for global oil.
Russian oil had traded at a discount of several U.S. dollars per barrel to Brent in Indian ports since the start of conflict in Ukraine in 2022 as Russia diverted oil sales to Asia after the EU imposed an embargo on Russian sales. Indian refiners have relied on Russian oil as feedstock in recent years.
The war in Iran has fuelled a significant bump in demand for Russian oil and gas, the Kremlin said on Friday.
Traders are selling Russian Urals to India at a premium of $4-$5 per barrel to Brent on a delivered basis upon arrival at Indian ports in March and early April, Reuters reported on Thursday, after the United States gave Indian refiners a waiver to resume buying Russian oil.
The grade's discount to Brent in the Russian Baltic Sea port of Primorsk narrowed by some $5 per barrel to around $20 per barrel on the FOB (free on board) basis, Reuters calculations showed on Friday.
While outright prices for Brent rose 25% in the past week to $89 per barrel, prices for Russian Urals oil eclipsed those gains effectively rising 50% to $68.6 from $45.7 per barrel on an FOB basis in Primorsk.
Urals oil is now above the G7 price cap of $60 per barrel at the port of loading for the first time since last July and is above the fresh EU price cap of $44.10 per barrel, according to LSEG data. Both G7 and EU price caps were imposed following Russia's invasion of Ukraine and mean sellers of Russian oil above those caps can't use Western shipping services and insurance.
PROFIT IS UNDERCUT BY RISING COSTS
Russian oil sellers' profits will be curbed by rising freight expenses as it costs about $15 million to charter an Aframax vessel, with a deadweight of some 100,000 metric tons, to carry oil from Russian Baltic ports to India, two traders said.
That's an increase from around $10 million-$12 million in February.
Freight costs for cargoes loading from the Russian Black Sea port of Novorossiysk, which resumed loadings on Friday after recent drone damage, are lower than at Baltic ports at $13 million, traders said.
The discount for Russian Urals loading from Novorossiysk on an FOB basis for India rose to $14 per barrel versus dated Brent, according to Reuters calculations, up $10 per barrel from recent estimates.
(Reporting by Reuters; Editing by Elaine Hardcastle and Susan Fenton)
Rising demand due to the war in Iran and restricted oil routes has led Urals oil to surpass Brent prices in Indian ports.
The war choked the Strait of Hormuz, disrupting oil routes and increasing demand for Russian oil in Asia, particularly India.
Traders are selling Russian Urals oil to India at a premium of $4–$5 per barrel above Brent on a delivered basis in March and April.
Freight costs have risen to about $15 million to charter an Aframax vessel from Russian Baltic ports to India, up from $10–$12 million.
Sellers of Russian oil above the price caps cannot use Western shipping or insurance, limiting export options at higher prices.
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