Russia's Crude Prices Swing Wildly Amid Iran War Fears

Russian crude prices have fluctuated wildly in recent months due to the Iran war and its impact on global supplies. The conflict has created a barometer of market anxiety, with discounts swinging from $2 a barrel before the conflict to premiums of up to $20 over benchmark Brent.

When Iran effectively shut the Strait of Hormuz in early March, crude tankers carrying Gulf supplies were stranded, triggering a frantic search for alternative barrels. Russia became the saviour, with ample Russian cargoes already afloat, including in the Indian Ocean, allowing them to reach Indian refiners relatively quickly.

Sellers of Russian crude were able to command hefty premiums as buyers scrambled for every available cargo. Indian refiners paid premiums of $12-20 a barrel for Russian oil, doubling their imports from Russia in March. The cost of procuring those barrels has fluctuated with changing perceptions of supply risk.