The IEA reported Russia’s revenue from oil exports hit the highest level in 2023.
The price of Russian seaborne crude moved above the $60 price cap on average for the month, the group said.
The surge in price for Russia’s Urals crude points to supply tensions for other oil benchmarks as OPEC+ cuts supply.
Russian oil was sold above the Group of Seven’s price cap throughout July, helping Russia pull in its highest oil revenue in eight months, according to a new report from the International Energy Agency.
Global crude prices moved higher in July and into August with Saudi Arabia’s production cut. That pushed Russia’s seaborne crude shipments to $64.41 a barrel on a weighted average, the IEA said, above the $60 cap agreed upon by G7.
“Tightening physical balances in the wake of Saudi output cuts and lower Russian loadings added additional momentum to the price rebound, pushing crude forward curves deeper into backwardation,” the IEA said in its monthly oil market report.
Researchers also noted that higher crude prices, combined with narrowing discounts for Russian grades, boosted Russia’s export revenues up by $2.5 billion to $15.3 billion in the month.
Still, that figure remains about $4.1 billion below the levels reached at the same time in 2022. Russia’s oil exports averaged about 7.3 million barrels a day in July, according to the IEA.
Last year, Western nations imposed the price cap in an attempt to keep Russian supplies on the market while curbing Russia’s ability to fund its war in Ukraine.
Historically one of the biggest oil exporters in the world, an all-out ban on Russian supplies would likely cause too severe a supply shock and oil price spike.
As far as the price cap mechanism, companies can only move Russian oil if they pay less than $60 a barrel. One key consequence has been the emergence of China and India as big buyers of discounted barrels.