Russian Urals crude is being sold at a deeper discount — Bloomberg
Against the backdrop of escalating tensions in the Middle East, the discount on Russian Urals crude has begun to widen for the first time in recent months. This could hurt the profits of Russian oil companies and reduce tax revenues to the Kremlin’s budget. The widening discount on Russian crude is putting more pressure on the country’s energy sector and reducing oil export revenues.
This is reported by Bloomberg.
The discount on Urals has increased
According to analysts, on May 7–8, the average discount on Russian Urals crude, which is exported through western Russian ports, rose to $23.9 per barrel relative to benchmark Brent crude. As recently as May 5, this figure stood at $22.67 per barrel.
Meanwhile, the average price of Urals at western Russian ports reached $80.61 per barrel on May 8.
The premium on shipments to India has narrowed
After delivery to India, Russian oil continues to be sold at a premium to Brent, but this figure has also dropped significantly.
While the premium stood at $6.75 per barrel in mid-April, it had already dropped to $2.40 by May 7–8.
Experts note that it is currently impossible to determine with certainty whether Russia is reaping the full benefit of the difference between the export price of oil and the price after delivery to end buyers.
The Kremlin’s oil revenues may decline
Bloomberg also noted that Moscow is actively using profits from oil and gas sales to finance the war against Ukraine.
The widening discount on Urals is limiting the windfall profits of Russian oil companies, which also affects tax revenues to the Kremlin’s budget.
Earlier, we also reported that Russian Urals crude oil prices have surged sharply — Bloomberg.
Oil prices have surged again, approaching $100 per barrel. The reason is shipping disruptions through the Strait of Hormuz, despite the ceasefire with Iran. The market remains volatile following a sharp drop the day before.
Oil prices have surged following reports of strikes on an Iranian oil terminal on Kharg Island. U.S. crude oil prices have risen by more than 2%. The market is reacting to the risk of supply disruptions.
