Russian Urals crude oil has plunged to a 1.5-month low — the price fell to $80 per barrel
Kyiv • UNN
Urals fell to around $80 per barrel due to a drop in Brent prices and high freight rates. This reduces Russia’s budget revenues.
The price of Russian Urals crude oil in the ports of the Baltic and Black seas has fallen to its lowest level in approximately 1.5 months. The price declined amid cheaper global oil and high transportation costs. Reuters reports this, citing LSEG data, UNN writes.
Details
This week, the price of Urals for loading in Primorsk, Ust-Luga and Novorossiysk fell to approximately $80 per barrel for the first time since the beginning of September. At the current exchange rate, this is about 6,630 rubles.
The main reason for the decline was a drop in Brent benchmark crude prices. The supply situation on the global market improved, while buyers gained more opportunities to purchase oil with shorter delivery times.
High transportation costs are reducing Russia’s revenues
More expensive transportation is creating additional pressure on Russian exporters. Due to a shortage of available tankers and military risks in the Black and Red seas, freight costs remain high.
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Back in September, Russian oil prices rose sharply because of supply disruptions amid the conflict in the Middle East. At the time, Urals cost more than $100 per barrel, while on September 16 the price exceeded $110.
At the same time, global supplies of petroleum products partially recovered, in particular due to increased fuel exports from China and agreements between the United States and Russia on diesel fuel.
The decline in the price of Urals directly affects the revenues of the Russian budget, since the price of this grade of oil is used to calculate extraction taxes and determine oil and gas revenues.