Urals

• Urals is the most common export grade of crude oil from Russia and an important benchmark for the medium sour crude market in Europe. ¹⁾
• Russian Export Blend Crude Oil, more commonly referred to as Urals crude
• Urals is a medium sour crude
• Urals crude, Russia’s flagship grade
• Uralas has a relatively high-yield of middle distillates when processed by refineries.

Before the war with Ukraine, Russia’s main export crude grade, Urals, traded at about a $3 per barrel discount to Brent, the international benchmark, reflecting its slightly lower quality.

Immediately following the invasion, the price differential quickly widened to as much as $40 per barrel, narrowed as Russian exporters adjusted, then expanded again as the new EU bans came into effect, standing at about $38 per barrel.

in a refinery, Urals yields more diesel than Brent

It is important to remember that Urals FOB Primorsk or Novorossiysk, quoted by Argus and Platts, have never been the proper market prices, derived from the actual deals. They were always assessments, estimates made by the agencies, calculated from the three elements – Brent Dated price, Brent-Urals spread estimate and shipping costs estimates. The agencies used to run the numbers by the market participants to check if they made sense and might get access to price information from some actual FOB sales, but the sense check stopped at that. It is also important to keep in mind that Brent was a reasonable benchmark for Urals, as these two crudes were sold in the same market to the same refiners.

Shipped from the country’s western ports

FOB Primorsk

Before the invasion of Ukraine in February, there was no differentiation between Russian origin Urals, or REBCO, and Kazakh origin Urals, with all crude marketed as Urals. However, with Urals crude becoming increasingly difficult to sell in Europe amid the fallout from the invasion, Kazakhstan on June 7 (2022) announced a rebranding of the crude it exports via Russia's Transneft system as Kazakhstan Export Blend Crude Oil (KEBCO). Since the invasion, Russia’s Urals crude has traded on average $21 below Brent, against perhaps a dollar over the five previous years. ²⁾

Russian Urals crude also shipped via Ukraine

With India and China eyeing discounted Urals crude, the impact is likely to be most felt on similar grades from the Middle East such as Oman Blend and Upper Zakum, traders said.