Decline in Russian Oil Freight Rates to India as Western Shipowners Reenter Market
As of March 26, 2025, reports from Moscow indicate that shipping costs for Russian oil exported from Baltic ports to India have decreased. This change comes as more Western shipowners return to the market following a drop in prices for Urals crude oil, which recently fell below $60 per barrel.
The Group of Seven (G7) nations, alongside the European Union (EU), established a price cap in late 2022 to hinder Moscow’s financial resources for its ongoing conflict in Ukraine. Under this measure, Western shipping services and insurance were restricted if Russian oil was sold at prices exceeding $60 per barrel.
Following a peak in early March, the average cost to ship Urals oil from Primorsk and Ust-Luga ports to India has now decreased to approximately $7 million for a one-way shipment. This decline aligns with a decrease in global oil prices, allowing Western shipping companies to reinstate their operations for Russian oil products.
As of Wednesday, Urals oil shipments from Primorsk were priced around $57 per barrel. Traders note, “With Urals remaining below the limit for a significant period, many shipowners have come back to the market and are offering competitive rates.”
Experts suggest that freight costs could further decline if a maritime and energy truce between Russia and Ukraine unfolds, although the timeline and specifics of such agreements remain uncertain. Earlier this year, freight rates surged following new U.S. sanctions impacting Russian energy interests, prompting sellers to seek alternative tankers.
Despite the recent drop in costs, shipping rates are still notably higher than they were in January, when it ranged between $4.7 and $4.9 million to ship crude oil from Baltic ports to India.
Overall, the easing of freight rates signals a shifting landscape in the global oil market and the possible return of Western shipping interests in the arena of Russian oil exports.
