Urals oil has risen in price in Chinese ports against the backdrop of a shortage of sour grades in the world

Russian Urals oil with deliveries to Chinese ports at the end of June and July is estimated at a discount of $7.5-$8 per barrel to ICE Brent. This is an average of $2 per barrel higher than the previous month and is the highest since December 2022, when the Russian oil price ceiling was introduced. This was reported by Reuters, citing data from traders.

Urals prices are rising as Chinese refiners look for cheaper feedstock due to rising demand for sour crude, four traders said. “The European market lacks sour oil, as there is currently no Urals oil and Kurdistan crude. This supports the demand for sulphurous grades worldwide,” said a trader in the European market.

Urals oil accounted for about 37.4% of China’s total oil imports from Russia in April, compared to 27.5% in March and about 8% in February, according to data from the shipping company Vortexa.

In December 2022, the G7 countries, the EU and Australia introduced a cap on Russian oil prices at $60 per barrel. In April, President Vladimir Putin signed law on the calculation of export duties on Urals, taking into account the cost of Brent. From April 1, the maximum discount is reduced from $34 per barrel to $25 per barrel by July.

Read more in the publication “Kommersant” “Urals buyers pounced on the discount”.

Maria Fedotova