Bloomberg: The Price of Russian Urals Oil for China Has Fallen to an Unprecedented Level

Prices for Russia’s flagship Urals crude oil supplied to China have dropped to an unprecedented low, Bloomberg reported, citing traders familiar with the market.

According to the sources, the price of Urals this week fell by around $10 per barrel below Brent futures.

The decline was driven by reduced demand from Indian buyers. Bloomberg noted that this has created new opportunities for Chinese refiners to purchase Urals crude, as they traditionally buy mostly ESPO oil, which is shipped from Russia’s Far East.

Data from Kpler show that India’s pullback has pushed the volume of Urals crude stored on tankers to more than 13 million barrels, the highest level in at least a decade. Almost half of this oil is located in the Arabian Sea, while nearly one-fifth is in the Singapore Strait and the Yellow Sea, making it relatively easy for Chinese buyers to access.

According to Kpler, China’s imports of Urals crude have increased to around 400,000 barrels per day since the beginning of the year, marking the highest level on record.

• The Indian company Reliance Industries Ltd, which owns the world's largest oil refinery complex, in February and March will start importing again russian oil after a one-month pause.
• According to preliminary estimates by Reuters, Russia's oil and gas revenues could to fall by 46% in January due to lower oil prices and a stronger ruble.