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Russian Urals crude traded at $49.48 per barrel in January, with rising transportation costs compounding a discount that has seen the country’s flagship crude price drop by 42% year-on-year, according to Russian Finance Ministry figures cited by Turkey’s Anadolu Agency.
Official figures released on Wednesday showed a drastic decline from $85.64 in January 2021 to this year’s price of under $49.5 per barrel, Anadolu Agency reported.
While slightly different from the Russian Finance Ministry figures, Platts (part of S&P Global Commodity Insights) on January 30th assessed Russian Urals at $45.86 per barrel, which at the time represented a discount to Dated Brent of $38.77.
S&P Global notes that prior to Putin’s invasion of Ukraine, Urals was trading at a ~$10 discount to Dated Brent.
Western sanctions, including an EU ban on Russian seaborne crude, which went into effect on December 5th, and a G7 price cap of $60 on Russian oil imports has resulted in a redirection of trade in Urals, mostly to India and China.
On Wednesday, Russian Deputy Prime Minister Alexander Novak told Russian media that the country’s oil production and export situation remained stable despite Western attempts to derail oil revenues. Novak said the Urals price was acceptable,
Novak told Rossiya-24 TV that there are also expectations for demand recovery in China once COVID infections and deaths reach their peak and start to move in the opposite direction. China’s demand recovery could boost prices for Urals.
The statement followed the virtual meeting of OPEC+ ministers earlier on Wednesday, during which time the Joint Ministerial Monitoring Committee (JMMC) recommended that no changes be made to oil production quotas due to uncertainties around Chinese demand and Russian supply over the coming months.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com