Russian crude oil prices hitting premium price levels

High demand on some routes is the main driver, Deputy PM Aleksandr Novak has said

Russia has been trading oil without a discount and even at a premium on some routes, Deputy Prime Minister Aleksandr Novak said on Thursday, as cited by Vedomosti.

Global energy markets are under strain due to the fallout from the US-Israeli campaign against Iran, which has disrupted transit through the Strait of Hormuz and caused a sharp rise in oil prices, while boosting Russia’s pricing power. The country’s supply has not been affected.

Western sanctions had previously forced Russia to sell crude at a discount to global benchmarks under a price cap system, currently set at about $44 per barrel. In oil trading, selling “at a premium” means crude is priced above a reference benchmark or comparable grades, rather than below it at a discount.

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While real-time pricing for Russia’s Urals blend is not publicly available, benchmark Brent was trading at around $106 per barrel on Thursday, and US West Texas Intermediate (WTI) at about $93, according to market data.

Speaking on the sidelines of the Russian Union of Industrialists and Entrepreneurs congress in Moscow, Novak said that Russia has reserves to increase exports and plans to use them, adding that the country has diversified supply routes, including the Eastern Siberia-Pacific Ocean pipeline to China, transit through Kazakhstan, and ports in the Black Sea and the Baltic.

Kremlin spokesman Dmitry Peskov said on Wednesday that strong global demand for Russian oil could eventually make it difficult to fully satisfy all buyers.

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President Vladimir Putin, meanwhile, has warned against using rising energy prices for short-term gains, saying that higher export revenues could create “a temptation” to spend additional income on dividends or increased budget expenditures. “It is necessary to maintain prudence,” he told the congress in Moscow. Markets remain volatile and “if today they have swung in one direction, tomorrow they may change in another,” he noted.