G7 drops Russian price cap reviews despite oil surge - report

Quantum Commodity Intelligence – The G7 and its allies have postponed regular reviews of the Russian oil price cap despite oil prices rocketing to yearly highs and comfortably exceeding the price ceiling introduced late last year for crude.

According to Reuters, the G7 has not reviewed the cap since March and has no immediate plans to review the scheme, citing sources familiar with G7 policies.

Russia published its average price for Urals crude oil sales at $74/b FOB for August, around $11/b under the Brent futures average for the month.

Most Urals is now placed into Asia, with trading sources reporting sales into India at around $5/b below Dubai. On Wednesday, Dubai topped $90/b for the first time this year, putting the medium-sour grade on a delivered basis comfortably above $85/b.

The lighter ESPO grade was heard offered Wednesday at a small premium to Brent futures, valuing the grade above $90/b delivered into China and over $30/b above the nominal $60/b cap.

Russian refined products have also smashed through the price ceilings, which was set at $100/b for diesel and gasoline, while naphtha and fuel oil were fixed at $45/b.

Benchmark 10ppm diesel was assessed Wednesday at over $120/b FOB Singapore, while both naphtha and fuel oil are at least $30/b over the price ceiling, based on Asian pricing.

European diesel prices were even higher, quoted around $130/b in early trade Wednesday.