With the decline in export volumes of Russian export oil Urals, which took place according to the agreements on production cuts with the countries of the “OPEC +”, the price of this variety of oil mixture have reached their highest level it has ever reached since 2001.
Statistics provided by the Platts news Agency (an Agency specializing in the publication of data on oil prices, oil products, natural gas, etc. — approx. transl.), shows that the price of Russian export oil Urals, delivered in the port of Rotterdam 30 June 2020, was above $ 2 per barrel compared to the cost of each barrel of Brent crude oil.
Even after the sharp fall of export of oil Urals, which was observed in may-June, in July there has been an even greater export decrease on a monthly basis.
The export by sea of oil Urals for July shows that it is a collection of oil in volume 772 314 thousand barrels per day, which means a drop in the load level of 534 of 730 thousand barrels per day, compared with daily volumes of exports recorded in 2012.
Sources close to the situation indicate that exports of Urals oil in July reflects the continued General reduction of production group countries “OPEC” in the volume of 9.7 million barrels per day, and the increase of loading of oil refineries in Russia, which has sharply reduced the amount of oil available for export.
The decline in oil countries “OPEC+” broke the existing world balance of export of heavy and light oil, and sharply reduced opportunities and load of oil refineries.
According to one dealer company, one of the European refineries for the batch of oil purchased for download in the period between 7 and 11 June, paid for every barrel of oil (Urals — approx. transl.) two dollars more than Brent. Each barrel of oil the party that was downloaded at the end of June, was more of a barrel from the party of Brent crude already at 2 dollars 35 cents.
All Mediterranean traditional importers of light oil experienced a sharp reduction in supply for this grade. They had to reduce their search to the volumes that they can process in the face of declining production and imports.
According to Agency Platts, in the moment, when there was decrease in the demand for oil from China, the tanks which have accumulated significant reserves in connection with the reduction of the processing costs because of the crisis caused by the pandemic, the European refineries, and plants of the Mediterranean region might be able to get some respite and can count on some increase in supply, albeit at a higher price. As a result, European refineries will also be able to somewhat replenish their own reserves and opportunities for processing.