Novak: Potential for further reduction of Urals discount is low - about $5/bbl from current $11-12

MOSCOW. Oct 13 (Interfax) - The pivot in oil supplies to the Asia-Pacific region has reduced the Urals discount to Brent to $11-12/barrel, but the potential for a further reduction is decreasing, Deputy Russian Prime Minister Alexander Novak said in an interview with Business FM.

He said this discount was $35-38 at the beginning of the year amid uncertainty and market concerns about purchasing Russian oil and petroleum products. In addition, the increase in freight and insurance rates has had an impact.

"But the after a while, after the situation began to be resolved, new partners were found and insurance and reinsurance was negotiated with our Russian companies. All this significantly mitigated the risks and uncertainty, and the discount decreased in August-September to approximately $11-12, that is, almost 71%-75%," Novak said.

Novak said further reductions were possible: "There is still a little potential for the discount to reduce, about $5."

Novak said the downward trend was associated with a decrease in risks associated with Russian oil supplies. The reduction in the discount, he said, was due to the stabilization of exports, especially to the Asia-Pacific region, as well as strong competition for oil on the world market.