Why Russian Urals oil has become more expensive than British Brent

Events associated with the second wave of coronavirus infection and the economic downturn have a direct impact on the dynamics of commodity prices in world markets. Most of the refineries have reduced production due to a drop in demand for oil, while some of them may even go into hibernation mode in winter. One of the surprises of the current situation was the rise in the price of Russian Urals oil compared to British Brent. The resource OilPrice.com tells about this unprecedented trend in this century.

So, at the end of October this year in north-west Europe the cost of the Russian brand of "black gold" was $ 0,55 per barrel higher than that of Brent, in the Mediterranean the difference in price reached 0,6 in favor of Urals.

The break-even of the Russian budget is possible only if the prices for Russian oil are not lower than 42,4 dollars per barrel. Russian oil companies, prompted by the need to comply with the OPEC Plus deal and by the arguments of the main financial department of the state, took the path of reducing both production and export of raw materials. The Kremlin has been consistently reducing oil production, and due to a decrease in its amount on the world market, its price is growing.

Another factor in the growth of Urals was its deficit in November, which guarantees that there is no tendency for it to fall in price. Thus, one of the main Russian ports on the Baltic, Ust-Luga, will be under repair from 7 to 16 November, which will reduce its throughput this month.

This “controlled shortage” of raw materials also softened the downward trend in the forward market - even in January 2021, Urals oil prices will be higher than Dated Brent

- say analysts at OilPrice.com.
  • Photos used: https://pixabay.com
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  1. boriz Offline boriz
    boriz (boriz) 6 November 2020 13: 40
    Or maybe everything is simpler? I, somewhere, in the spring / early summer already wrote that Brent is undeservedly considered a benchmark. It is mined now about (and maybe less) 1%. And mixtures of the Urals brand - more than 12%. And in terms of the density / sulfur content ratio, Urals is also better.
  2. Sergey Latyshev (Serge) 6 November 2020 15: 24
    All true.
    Especially if you do not say a word about the price itself, about the sales volumes, and how long it has surpassed in price - by a week, a month or three ...
    1. boriz Offline boriz
      boriz (boriz) 6 November 2020 15: 51
      Since May, somewhere, the Brent has not dropped below. Plus, the supply of Urals to the United States, as it has grown 3 times over the past year, is not significantly decreasing.
      1. Sergey Latyshev (Serge) 6 November 2020 20: 34
        Thanks, that's cool.
  3. gorenina91 Offline gorenina91
    gorenina91 (Irina) 6 November 2020 16: 02
    Why Russian Urals oil has become more expensive than British Brent

    - All that remains is to believe in these fairy tales and ... and ... and release Iran with its excellent oil for "free sale" ... - And when Iran (with the help of China) floods the market with its cheap fine oil (which can be immediately refuel as fuel in ships) ... -then it will be necessary to come up with new fairy tales ... -Or Russia will then start adding "ski-pi-dar" to its "demanded" Urals ??? - Or it will switch directly to hydrogen ...