18th-19th April Important Events By Kandela IAS

India and China buy Russian oil above Western price cap

Indian and Chinese ports have purchased the majority of Russian Urals oil in April at prices above the Western price cap of $60 per barrel.
The Kremlin is benefiting from stronger revenues despite the West’s efforts to restrict funds for Russia’s military actions in Ukraine.
The Western price cap is expected to remain unchanged for now, according to a G7 source, despite some European Union countries’ desire to lower the cap and increase pressure on Moscow.
Supporters of the price cap claim that it reduces Russia’s revenue while maintaining oil flow, while opponents argue that it is too lenient to force Russia to reverse its activities in Ukraine.
Refinitiv Eikon’s recent data reveals that most Russian Urals oil cargoes that loaded in the first half of April are headed to India’s and China’s ports.
India accounted for over 70% of seaborne Urals supplies, while China accounted for roughly 20%, according to Reuters calculations.
Lower freight rates and smaller discounts for Urals against global benchmarks raised the daily price of the grade above the cap earlier in April, after a period of trading below it.
Although India and China have not agreed to comply with the price cap, the West had hoped that the threat of sanctions would discourage traders from assisting those countries in purchasing oil above the cap.
According to traders, the average discounts for Urals were $13 per barrel to dated Brent on a DES basis in Indian ports and $9 to ICE Brent in Chinese ports, while shipping costs were $10.5 and $14 per barrel, respectively, for loadings from Baltic ports to India and China.
According to Reuters calculations, the Urals price on an FOB basis in Baltic ports, which allows for around $2 per barrel of additional transportation costs, has been slightly above $60 per barrel in April.

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Lower freight rates

Recent Reduction in Shipping Costs for Russian Oil

Shipping costs for Russian oil have come down significantly in recent weeks due to the easing of Russian port ice conditions and increased availability of tankers. This reduction in freight rates is benefiting both Indian and Chinese buyers of Urals crude oil.

Freight Rates for Urals Cargoes to India

Freight rates for Urals cargoes loading in Baltic ports for delivery to India have eased to $7.5-$7.6m from $8-$8.1m two weeks ago.
This reduction in costs is a result of increased availability of tankers.
Cost of Tanker Shipment to China

The cost of tanker shipment from Baltic ports to China was $10m, down from nearly $11m a couple of weeks ago.
This decrease in freight costs is due to the easing of Russian port ice conditions.
Winter Freight Costs for Urals Cargoes

During winter, freight costs for Urals cargoes jumped above $12m for both India and China.
The current reduction in shipping costs suggests that Russian oil suppliers have secured enough vessels despite long distances.
OPEC+ Output Cuts

Output cuts announced by the OPEC+ group of oil producers at the start of April have also boosted values for various grades around the world, including Urals.
This has further increased the value of Urals crude oil for both Indian and Chinese buyers.
Urals Prices in Indian and Chinese Ports

In March, Urals prices in Indian ports traded at a discount of $14-$17 per barrel to dated Brent on a DES basis.
Meanwhile, the price at Chinese ports was approximately $11 per barrel against ICE Brent.
Lower shipping costs may help to reduce this discount in the future.

India to Challenge WTO Panel Decision on IT Tariffs through Appeal

India is planning to appeal against a ruling by a panel at the World Trade Organization (WTO).
The panel ruled that India violated global trading rules by imposing tariffs on some IT products.
The dispute was with the European Union, Japan, and Taiwan over import duties on IT products.
India will appeal the decision, according to a government source from the trade ministry.
The WTO’s top appeals bench is not functioning due to US opposition to judge appointments, so the case will sit in legal purgatory if India appeals.
In 2019, the EU, Japan, and Taiwan challenged India’s introduction of import duties for a wide range of IT products, saying they exceeded the maximum rate.
India’s trade ministry has not yet commented on the matter.

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18th-19th April Important Events By Kandela IAS