Urals discounts in December fall by $0.5-$0.7 per barrel, in southern Russia below $12 per barrel, close to zero in China - Argus
MOSCOW. Dec 17 (Interfax) - The price of Urals oil FOB was in the range of $61.1-$62.2 per barrel in the first half of December compared to $61-$61.9 per barrel at the end of November, while the discounts for the benchmark North Sea Dated (NSD, which reflects the price of a basket of North Sea crude oils including Brent, Forties, Oseberg, Ekofisk and Troll, as well as the U.S. Midland WTI) were in the range of $11.7-$12.8 per barrel compared to $12.4-$13.2 per barrel in November, down $0.5-$0.7 per barrel, according to data from the pricing agency Argus reviewed by Interfax.
The cost of the North Sea benchmark in December slightly decreased from November, falling from $74.2 to $73.9 per barrel.
The discount of Urals at the Primorsk port (FOB) to the North Sea benchmark narrowed by $0.5 per barrel in December, from $13.2 to $12.75 per barrel. The price of Urals at Primorsk in December rose to $61.1 compared to $61.05 per barrel in November.
The discounts of Urals Suezmax FOB Novorossiysk to the North Sea benchmark fell $0.65 per barrel in December to $11.69 per barrel, from $12.3 per barrel in November. The price increased from $61.9 to $62.2 per barrel. The discounts and prices for Urals Aframax FOB Novorossiysk were once again exactly the same as those for Urals Suezmax FOB Novorossiysk.
The price of Russian Urals in Indian ports (DAP West Coast India) slightly fell in the first half of December, from $70.4 in November to $70.2 per barrel. The discount to NSD slightly narrowed from $3.8 to $3.66 per barrel, Argus said.
The price of another Russian crude oil grade, ESPO, which is sold from the Kozmino port in the country's east, slightly decreased from $70 in November to $69.9 per barrel in the first half of December. The discount narrowed from $2.1 per barrel to $1.9 per barrel.
The G7 countries' sanctions on Russian oil have reshaped global supply flows, with Russian oil redirected to India and China instead of Europe. Most Urals exports are sent to India, but around 200,000 barrels per day are shipped to China. This represents a more than three-fold increase on the pre-2022 level of 60,000 barrels per day. This oil has become an attractive and affordable alternative for Chinese buyers compared to sour grades from the Middle East. Urals competes with Arab Light and Iranian Light in China.
Since June, Argus has launched a new quotation for Russian Urals oil supplied to China. In December, Urals sold for $72.06 per barrel in Shandong province, compared to $72.3 per barrel in November. Here, the discount to ICE Brent also narrowed by nearly $0.5 per barrel, from $0.54 to $0.09 per barrel.