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As more Western shipowners return, the Russian oil shipping rates to India from Baltic ports are reduced.

Two traders reported that the freight rates for Russian oil from its Baltic ports into India have fallen from recent records highs due to an increase in Western shipowner offers after Urals crude prices dropped below a price ceiling of $60 per barrel.

The Group of Seven, in coordination and cooperation with the EU imposed a price cap on Russian oil at over $60 per barrel in late 2022, blocking access to Western shipping and insurance services. This was done to limit Moscow's financial ability to fund its Ukraine War.

After reaching a record high in early March, the cost of shipping Urals crude oil from the Baltic port of Primorsk to India has fallen to an average of $7 million for a one-way shipment.

The price of Urals crude oil in Russia's port fell below $60 a barrel in March. This allowed more Western shipping firms to resume their services, including freight, for Russian oil.

On Wednesday, the price of Urals oil shipped from Primorsk port was $57 a barrel.

One Urals trader said, "Urals is below the limit of $60 per barrel for quite some time. Many shipowners are now entering the market to offer good prices."

If implemented, the freight rates for Russia's oil may continue to fall. The Black Sea maritime security agreements have yet to be implemented.

After a new round U.S. energy sanctions announced in January took effect, the price of Russian crude shipping increased sharply. Russian oil sellers had to find new tankers to replace the ones that were hit by the sanctions.

The cost of shipping Russian crude oil from Baltic ports to India in January was $4.7-4.9million. Reporting by Jane Merriman (Editing by Jane Merriman).

(source: Reuters)