Discounts on Russian Urals oil have reached a historical level of $25.8 per barrel.
Urals oil prices have dropped to their lowest since the start of the war in Ukraine, indicative of significant discounts by Russian oil producers reaching $25.8 per barrel compared to Brent.
According to Bloomberg, last week in Novorossiysk, batches of Urals oil were sold on average for $38.28 per barrel, which is $2.8 less than the week before. In Baltic ports, the price fell by $2.4 to $41.16 per barrel, while ESPO, which is shipped to China from Pacific ports, decreased in price by $1.6 to $52.36 per barrel. This trend is seen amid the introduction of U.S. sanctions against major Russian oil companies, as well as reduced demand from refineries in India and China.
Although the flow of oil from Russian ports remains substantial, increasing from 3.94 to 4.24 million barrels per day at the beginning of December, more volumes of “black gold” are being stored at sea due to the uncertainty of buyers. Analysts at Kpler predict that Russia may lose up to 1.4 million barrels of daily exports due to sanctions, but volumes may recover after new routes are established and intermediary systems are set up.
Discounts on Urals oil exceeding $20 per barrel may persist for a long time, which could have serious implications for Russia’s budget. It is forecasted that the decline in oil and gas revenues might accelerate if current trends continue.
| Port | Price per barrel ($) | Weekly change ($) |
|---|---|---|
| Novorossiysk | 38.28 | -2.8 |
| Baltic ports | 41.16 | -2.4 |
| Pacific ports | 52.36 | -1.6 |
