Russian oil depreciated to 1999 level

US, WASHINGTON (ORDO NEWS) — The price of deliveries of the Urals export grade — Russia’s main source of income — in European markets fell to $ 16.20 per barrel (with delivery to Rotterdam) according to Argus pricing agency.

This is the minimum since June 1999 – the previous period of the collapse in oil prices in 1998-1999.

Over the past week, the Russian variety fell by $ 5.51 per barrel. The discount to the North Sea grade Brent rose over the week by $ 1.25 to $ 4.75 per barrel (with delivery to Rotterdam). This is the maximum discount since June 2008.

The European standard Brent is traditionally more expensive than the Russian one, but the difference began to grow from March 6, 2020, when Saudi Arabia withdrew from the OPEC + deal and a price war broke out.

The discount on Urals shipments for 80,000 tons of tankers in the Mediterranean last week did not change relative to Brent (with delivery to Augusta), remaining at $ 2.50 per barrel. Here, the discount on Russian oil remains at the highest level since May 2018. On the whole, in the Mediterranean, the Russian variety fell in price by $ 4.26 per week – to the minimum since February 2002 in the amount of $ 18.45 per barrel (in Augusta).

The price of offshore batches of Russian oil is decreasing as it approaches April 1, the official date for the cessation of oil production cuts by the OPEC + alliance countries.

Already announced an increase in shipments of Urals from Russian ports in April by 13% compared with March to 2.11 million barrels per day (8.78 million tons).

But shipments may exceed the plan, as many Russian oil companies, despite their desire, did not receive the approval of Belarus to resume shipments in April. Then the volumes from the Belarusian direction will go to Europe. Now in the world there is an excess of oil in the amount of 15-20 million barrels per day due to the pandemic and the global decline in economic activity.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.