Russian oil becoming cheaper: Bloomberg reports increase in discount on Urals crude
Illustrative photo: oil (Getty Images)
Amid escalating tensions in the Middle East, the discount on Russian crude has increased for the first time in a while, which could lead to a reduction in Russian budget revenues, according to Bloomberg.
Discount on Urals crude widens
According to analysts, on May 7–8, the average discount on Russian Urals oil exported through western ports increased to $23.9 per barrel compared to the benchmark Brent crude. On May 5, this figure stood at $22.67 per barrel.
At the same time, the average price of Urals at Russia’s western ports reached $80.61 per barrel on May 8.
Premium on deliveries to India declines
After delivery to India, Russian oil is still sold at a premium to Brent, but this indicator has also declined significantly.
While in mid-April the premium stood at $6.75 per barrel, on May 7–8 it dropped to $2.4 per barrel.
Experts note that it is currently impossible to precisely determine whether Russia fully benefits from the difference between export prices and final sale prices to end buyers.
Kremlin oil revenues may decline
Bloomberg also noted that Moscow actively uses revenues from oil and gas sales to finance its war against Ukraine.
The widening discount on Urals limits excess profits for Russian oil companies, which also affects tax revenues flowing into the Kremlin budget.
Iraqi authorities have reported the discovery of a large oil field in the southern province of An-Najaf. According to local officials, the deposit area, located near the border with the United Arab Emirates, exceeds 8,700 square kilometers.
Amid the war in Iran, global oil reserves have begun to decline at an accelerated pace due to reduced supplies from Persian Gulf countries. Analysts warn that the energy market situation continues to deteriorate amid regional instability.
