MOSCOW: Sluggish demand in Asia and rising fuel flows to Europe have dampened pricing for Moscow’s flagship Urals crude oil blend, setting the stage for a protracted period of weak prices for the Russian oil, traders said.
Urals differentials to the benchmark Brent blend in northwestern Europe, a key metric for the pricing, reached an all-time high of $2.35 per barrel at the end of April, in line with a long-term goal of Russian President Vladimir Putin. He had long complained about Urals’ discount to Brent, questioning if the pattern was justifiable.
The Urals’ differentials improved in late spring when demand in China, where economic activity got revitalised following an easing of the coronavirus-related lockdowns and appetite for the relatively cheap Russian oil increased.
In May and June, some 1.5 million tonnes of Urals each month were redirected to Asia from Europe as part of the arbitrage deals, according to Refinitiv Eikon data.
Oman Observer is now on the WhatsApp channel. Click here
