Europe avoids Russian crude oil as prices go up

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European refiners avoid Urals, Russia’s flagship crude oil, which is now more expensive than Brent crude oil after Russia cut exports under the OPEC + deal, traders told Reuters on Friday. oil.

In recent weeks, the price of the Urals, a mixture of heavy acid oil from the Urals Mountains and light oil from Western Siberia, has risen at a price higher than the prices for dated Brent after Russia considerably reduces its quality exports.

In April, when oil prices collapsed with the collapse in demand and the Saudi-Russian oil price war, the price for the Urals was about $ 4 a barrel lower than dated Brent. Since then, the Urals has become more expensive than Brent and is trading at around $ 2 a barrel more than dated Brent.

Urals’ exports from Russian Baltic and Black Sea ports are expected to reach around 880,000 bpd in the first ten days of July, Bloomberg estimated on the basis of loading schedules. If this rate continues throughout the next month, Russian exports from the Urals would be the lowest in at least 12 years, according to Bloomberg.

As the price of the Urals has gone up, European refiners are exploring alternatives and considering switching to the United States, West Texas Intermediate, to Johan Sverdrup of Norway, or to light oil from West Africa, said traders at Reuters today.

“Oil refineries do not buy the Urals at current prices, while light blends feel good … There are a lot of WTIs in Europe,” a trader told Reuters, adding that Norwegian Johan Sverdrup for the July delivery was exhausted.

Urals price is expected to continue trading at a premium over Brent July, as Russia plans to cut quality exports from its Baltic ports to 2.5 million tonnes next month, compared to 4.4 million tonnes forecast for June, Reuters reported on Thursday. , citing a preliminary loading plan he saw.

By Charles Kennedy for Oilprice.com

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