Bloomberg announced the sale of Urals at a price of $38 per barrel

On January 6, Russian Urals brand oil was sold at a price one and a half times lower than the established price ceiling – $37.8 per barrel. This was reported by Bloomberg, citing data from the independent pricing agency Argus. At the same time, benchmark Brent crude was trading at $78.57 that day.

According to the agency, this dynamic is associated with Russia’s increased dependence on China and India against the backdrop of the loss of the European market. Moscow is forced to sell oil at a discount to compete with supplies from the Middle East, writes Bloomberg.

On December 3, 2022, the EU countries agreed on a price ceiling for Russian oil in the amount of $60 per barrel. The restriction came into force on December 5, along with a ban on the supply of Russian oil by sea to the EU countries. For oil products, the restriction will come into effect on February 5. In addition to the EU countries, the G7 countries and Australia also joined the ceiling.

After that, on December 27, Russian President Vladimir Putin signed Decree on retaliatory measures to the oil price ceiling. According to the text of the document, a ban is introduced on the supply of Russian oil and oil products to foreign companies and individuals, if the contracts directly or indirectly provide for a cap price mechanism.

At the end of 2022, Deputy Prime Minister Alexander Novak spokethat the benchmark Brent is currently trading at $80/bbl, while Urals is being sold at a discount to it. According to him, now the discount has slightly increased against the backdrop of uncertainty. “I am sure that stabilization is now [дисконта] will happen,” he said. According to the Deputy Prime Minister, Brent prices will remain volatile in 2023 and prices will fluctuate between $70-100/bbl. At the same time, the Deputy Prime Minister allowed local surges in oil prices due to a shortage of raw materials created by non-market factors.