The $1 billion-a-month spread to deliver Russian crude oil to India

There are fortunes to be made delivering Russian crude oil to India.

Price assessments by Platts, a unit of S&P Global, show a margin of more than $20 between a barrel of Russia’s Urals crude lifted in the Baltic region and the same oil delivered to the west coast of India. On a flow that’s now running at about 1.5 million barrels a day, that works out at $1 billion a month.

The European Union banned imports of Russian crude in December, putting the country at the mercy of two big buyers: China and India. Numerous new trading firms with ties to Moscow emerged — especially in Dubai — before the measure, along with a price cap on Russian oil, was imposed.

Urals cargoes in the Baltic are trading about $40 a barrel below Dated Brent, an important benchmark for physical oil trades, while cargoes delivered on the west coast of India have been discounted by a much smaller $20 a barrel on average since mid-January.

Some of the difference will go to pay for the tankers that make the two-month round trip. The export price is also more immediate than the delivered one. In theory, though, the gap implies big trading profits.