Russian oil prices increased due to demand from India and China, testing the viability of Western-backed sanctions, according to The Wall Street Journal.
April prices for Urals crude rose to nearly $55 per barrel from the daily low of $35 in January of this year, according to the data from commodities-data firm Argus Media.
If the trend continues, prices could soon hit $60 a barrel. This price would surpass the limit that the U.S. and its allies have put on Russian crude exports. Uncertainty over this possibility caused caution from traders in the recent weeks.
The $60 price cap on Russian crude oil came into effect on Dec. 5, 2022. This means that the U.S. and its allies are not allowed to facilitate exports of Russian oil unless it is sold below this price, with the goal of decreasing a main source of Russian revenue.
“Many traders and analysts expect oil to keep flowing nonetheless,” according to the article. Russia is likely to continue finding ways to transport oil through channels beyond the allies' control, operating in a shadow market that is more difficult to trace.
“Russia has absolutely no problem in placing all of its volumes in the market at terms that Russia considers reasonable. They just find another way,” former Russian energy executive and scholar at the Carnegie Russia Eurasia Center Sergey Vakulenko said to the WSJ.