The barrel rolls in a circle – Kommersant

Since May 1, OPEC+ countries have begun to reduce oil production. Then, in early April, an unexpected decision to remove about 1.5 million barrels per day of production from the market caused prices to rise by $10 per barrel and gave the IEA a reason to blame OPEC for creating a deficit. A month later, Brent is at the same level as in early April, around $78 a barrel. So, if OPEC’s goal was to raise oil prices, it has not yet been realized.

Who really won is Russia. Joining forces with the alliance allowed the authorities of the Russian Federation to pass off need as a virtue and present the March production cut, which in those conditions Russia would still have to go to reduce export discounts, as “a contribution to stabilizing the oil market.”

The prospects for a reduction in the supply of medium-sour grades of Arabic oil forced Indian and Chinese refiners to actively buy their analogue in the form of Urals, which made it possible to reduce export discounts by about a third. According to Reuters, in April, the average discount for Urals delivered to India from the Baltic ports was $10-12 per barrel relative to the price of Brent, and freight cost about $10 per barrel.

As a result, the cost of a batch of Urals at the port of departure came close to the price ceiling of $60 per barrel introduced by the West (it does not include freight), but in most cases did not exceed it. This situation suits Russian oil companies, which have no problems with exports due to de facto compliance with the ceiling and still earn quite enough, especially in ruble terms.

For the Russian budget, the situation is not so unambiguous. Although its revenues also rose in April thanks to the reduction of the Urals discount and the somewhat paradoxical weakening of the ruble against this background, in the longer term the Ministry of Finance, apparently, is not sure that it will be able to meet its oil and gas revenue targets. Doubts may be associated not only with the weak results of January-February, but also with the fall in revenues from the export duty on gas (Gazprom’s prices in Europe are still not close to what the Ministry of Economy expected), as well as with the prospects for a recession in the second half of the year.

Last week, Finance Minister Anton Siluanov not only announced a reduction in damper compensation for fuel, which will save the budget about 200 billion rubles, but also signaled that the Finance Ministry intends to further reduce Urals export discounts for tax purposes. In July, by law, the maximum discount will be $25 per barrel, although real discounts are already apparently close to $20 – the Finance Ministry has something to think about.