Tumbling oil prices push Russian crude below G-7’s $60 price cap

Plunging oil markets drove the price of Russia’s flagship Urals crude slump below a $60-a-barrel Group of Seven-imposed cap for the time since July.

Urals from the Baltic Sea port of Primorsk fell to $56.15, while the same grade at Novorossiysk in the Black Sea slumped to $56.55, according to data from Argus Media Ltd., whose data instruct G-7 policy on the price cap.

Headline oil prices have plunged in recent days despite a pledge by OPEC+ countries, which includes Russia, to reduce output in the first quarter of next year. That’s dragged down the price of Urals, which trades at a discount.

The west has also stepped up enforcement of Russian sanctions in recent weeks, sanctioning a total of eight tankers as well as the Dubai arm of an oil trader as it seeks to clamp down on widespread breaches of the cap. 

Since July, all mainstream Russian barrels traded above $60, punching a hole in efforts by US, G7 and their allies to limit the country’s oil revenues. 

The spread between the export and import price widened, Argus data show, implying a greater slice of the trade is going into the hands middlemen and shipping firms who are often anonymous.