(Bloomberg) -- Russia's flagship Urals crude oil rose to the cusp of a price cap that Group of Seven nations imposed in an effort to cut the Kremlin's funding for the war in Ukraine.
If the country's top export grade surpasses the $60 threshold, it would allow Moscow to claim a win of sorts by showing Russia can get its barrels to buyers around the world without help from western firms. The price cap allows Russian oil to be transported with western ships and insurance only if it's priced below the threshold.
But a vast shadow fleet of tankers has emerged since sanctions ratcheted up last year, helping to haul the nation's oil and work around the cap.
The grade rose to $59.98 a barrel at the Black Sea port of Novorossiysk on Tuesday, according to data from Argus Media. The pricing agency's assessments are important in determining future caps.
US officials have long argued that the price cap is there to give buyers leverage while ensuring that, if Russia can't transport its own barrels, there is no consequent oil supply shock.
But a breaching of $60 for Urals would nonetheless suggest Russia's ability to get its barrels delivered independently is growing.
Prices for oil that's similar to Urals have rallied around the world because those are the main type of supply that members of the OPEC+ alliance have been withholding from the market to prop up prices. Russia's own oil flows are showing signs of falling, in line with a pledge the nation made to cut exports.
Headline Brent futures rose as high as $79.75 a barrel on Wednesday.
Urals at the Baltic Sea port of Primorsk also gained, rallying to $59.38, the Argus data show.
(Updates with context from second paragraph.)
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