Urals premium hurts Russian integrateds
Russia’s Opec+ compliance has pushed its benchmark grade to a premium over Brent. But this is not good news for the country’s large integrated oil firms
Urals crude typically trades at a discount to Brent and many other international benchmarks because of its high sulphur content, which adds costs at refineries. And this discount widened in March and April as lockdowns resulted in scaled back operations at refiners in Europe—the main destination for Urals. However, under the new Opec+ deal Russia has pledged to curb supply, excluding condensate, by c.2.5mn bl/d, to 8.5mn bl/d in May, June and July. Urals is thus scarcer, driving up the price as some refineries cannot easily switch to other grades. Urals had a $1.90/bl premium to Brent on Tuesday, which narrowed to $0.85/bl on Wednesday, Moscow-based bank VTB Capital estimates. The premium wa
Also in this section
25 April 2024
Some companies with assets in Israel have turned towards Egypt as tensions escalate, but others are holding firm despite rising tensions
24 April 2024
But even planned exploration activity is unlikely to reverse declining output from mature fields
23 April 2024
Cheaper Russian barrels and lower overall crude prices have helped cut key oil consumer’s import bills in election year
22 April 2024
Pursuing three different goals as part of the same package may mean achieving none of them