Bloomberg: Russian oil rises in price as the number of buyers in Asia increases

The price of Russian oil and fuel is rising for buyers in Asia as the pool of large buyers from China and India expands. Writes about it Bloomberg. As the agency notes, this puts pressure on small refineries that consume cheap oil.

Traders say supply of Russian Urals and ESPO oil, as well as fuel oil, has risen in recent weeks. According to them, increased interest from Chinese state-owned and large private refineries such as Sinopec, PetroChina Co. and Hengli Petrochemical Co., in addition to increased demand from India, led to the fact that Russian raw materials began to be bought at higher prices.

The offered price for ESPO oil, which is usually shipped in the port of Kozmino (Primorsky Krai), was about $6.5-7.0 lower than for Brent, including delivery to China. Flagship Urals oil shipped from western ports was about $10 below that benchmark. However, that’s $2 more than last month, one of the biggest price spikes since the cap on offshore oil from Russia went into effect on Dec. 5.

The pool of buyers looking to import cheap oil from the OPEC+ producer has grown as more players put aside concerns about Western sanctions, Bloomberg notes. According to the International Energy Agency, in December 2022, the export of oil and petroleum products from Russia to India amounted to 1.6 million barrels per day. At the same time, part of the Russian raw materials, which are bought by China and India, redirected to Europe without discount.

By data Ministry of Finance, the average price of a barrel of Urals oil in February 2023 was $49.56, slightly higher than in January ($49.48). Urals barrel price fell 1.7 times per year. Against this background, budget revenues fell: Ministry of Finance appreciated a fall of 35%, while spending rose by 59%.

Anastasia Larina