Russia is dominating the international oil market. From Tom Luongo at tomluongo.me.com:
An interesting couple of posts from Southfront.org this week gives us some insight as to what’s happening in international oil markets.
Demand for Russian Urals grade oil is so strong that is has been trading at a pretty steep premium to Brent Crude this month. Southfront references this report from Argus research.
This means that the Russian Urals crude is trading at a premium to the European benchmark Brent. The premium is $1.55 per barrel in North-Western Europe and $2.55 – in the Mediterranean.
Argus names competition as the reason of Urals reaching such a high price. After the United States imposed sanctions against Venezuelan oil, American refineries began to willingly buy Russian heavy oil, very similar to the one exported by the Venezuelan PDVSA. In addition, demand for Russian oil in Asia is growing.
Traditionally, Urals trades at a discount to Brent because of a lack of a unified benchmark price for it. The July Shanghai Crude Oil futures contract closed at ¥299 (or $42.30) per barrel this week, putting it at a ~$1.70 premium to Brent Crude.