* Urals oil price down to $62.99/bbl in 2023 from $76.09 in 2022
* It's still above Western-imposed price cap of $60 last month
* Urals oil prices below the price cap now - LSEG
* Russia redirected its oil exports to China and India
MOSCOW, Jan 9 (Reuters) - The average price of Russian Urals oil blend fell to $62.99 per barrel in 2023 from $76.09 in 2022, Russia's finance ministry said on Tuesday, still above a Western-imposed cap of $60.
The ministry also said the average price of Urals oil blend had risen to $64.23 per barrel as of December 2023 from $50.47 a year earlier.
According to Reuters data, Urals spot prices in the
Mediterranean
The Russian economy relies heavily on the sales of commodities, especially oil and natural gas.
The European Union, G7 countries and Australia introduced the price cap of $60 per barrel on Russian oil in December 2022, aiming to curb Russia's ability to finance its military operations in Ukraine.
Russia, the world's second largest oil exporter after Saudi Arabia, was forced to cut exports of oil and oil products immediately after the price cap was introduced as it struggled to find enough ships to transport all of its output.
But it then managed to place most of its exports with domestic or non-Western foreign shippers, which do not require Western insurance coverage.
Still, Russian oil traditionally sells at a discount to international benchmarks such as Brent. The discount has widened following Western sanctions imposed over the Ukraine conflict, reaching around $30 per barrel at its peak in early 2023.
The ministry said on Tuesday that Brent prices averaged $77.88 per barrel in December, meaning the discount stood at $13.65 per barrel last month, up from $10.3 in November and $9.6 in October.
Russian Deputy Prime Minister Alexander Novak said last month that almost all of Russia's
oil exports
this year have been shipped to China and India.
He also said that Europe's share of Russia's crude exports has fallen to only about 4-5% from about 40-45%.
Though oil and products flows from Russia continue, overall costs have risen many times for Russian exporters due to the Western sanctions, traders said.
The main challenges facing Russian oil exporters in 2024 are logistics, money transfers and rising risks of new sanctions, they said. (Reporting by Darya Korsunskaya; writing by Vladimir Soldatkin and Felix Light Editing by Gareth Jones)
