Discount on Russian Urals oil reduced from $40 to $20 per barrel

The discount for Russian Urals oil compared to Brent oil has decreased from $40 to $20 per barrel, Deputy Director General of the Russian Energy Agency (REA) of the Russian Ministry of Energy Denis Deryushkin said at the International Baikal Risk Forum. About it writes TASS.

According to him, earlier the discount was so high due to the increase in the cost of freight of Russian ships, the lack of transaction insurance and the unwillingness of banks to provide letters of credit. “Today, due to the fact that freight has fallen a little and there are still alternative consumers, the discount on Urals is no longer $40, but $20. As before, this is a significant discount, a significant blow to the economy of mining companies, but in general, these are still comfortable realities in which one can exist,” said Deryushkin.

As the newspaper notes, by February 22, 2022, the Russian Urals grew after Brent and reached almost $100 per barrel. As a result of restrictions imposed in the European Union and the United States, Russia had to rebuild its supply chains and hastily redirect shipments to the Asian market, mainly to China and India. The gap with Brent began to widen, although usually the discount for Urals to Brent did not exceed $3 per barrel. In the spring, the discount reached $40/bbl, but since the end of August, Russian companies have been supplying Urals oil to Asia at a discount to Brent, on average $20-30/bbl.

On July 15, it became known that the Russian government plans to develop its reference grade of oil in 2023 and launch oil trading on the national platform. Such plans were stepped up after Western countries imposed a series of sanctions on Russian oil in response to a special operation in Ukraine. So far, Russia has been exporting oil under the Urals brand, the price of which is expressed as a discount on North Sea Brent.