the price of Russian Urals crude dropped to the lowest level in 1999
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the Price of Russian Urals oil dropped to $ 10 per barrel. This is the lowest level since March 1999, the newspaper reports Argus Media. The Russian budget for the next three years were formed taking into account the fact that Urals will cost 42.4 dollar per barrel.
meanwhile, futures for Brent crude on the Ice futures exchange began to rise after the statements of President of the United States Donald trump about the fact that Russia and Saudi Arabia will soon agree on measures to regulate the market. In addition, Argus Media emphasizes that because of the decline in international prices, transportation costs, payment of export duties, and certain other expenses exceed the average cost of Urals. In other words, the export of Russian oil Urals has become unprofitable. This situation has caught many market participants, as their prices on oil supply contracts both annual and short-term based on the value of the formula within one month of delivery.
At the end of March the average value of the quotes are still positive, although down by about 12 500 rubles per ton relative to the February level, emphasizes Argus Media. According to the Agency, the oil suppliers worry that the prolonged period of low prices will contribute to zero or even negative profitability of its sales in Russia.
In mid-March, the price of Urals oil for delivery in Europe for the markets of North-Western Europe fell below $ 19 per barrel, and by the end of the month dropped to about $ 16 – the lowest since 1999.
Saturiane of the oil market is due not only to the pandemic of mers because of the combat which stops production and falling consumption, but also the beginning of the economic “war of attrition” between Saudi Arabia and Russia. It provoked a demonstrative RF output of the transaction OPEC+ 9 March meant Moscow’s desire to increase oil production. In the context of the pandemic and the beginning of the economic crisis the experts evaluated this step as a suicide.
After the demarche of the Russian Federation similar decisions about increasing oil production began to take other exporters. This led to an even more dramatic drop in the price of oil, which Moscow more and more difficult to sell for other reasons. So, China started to refuse from hydrocarbons of Rosneft due to US sanctions against Russia.
Experts believe that even the first effects of the “oil war” for Russia are disastrous. However, in the Kremlin deny it.
in Less than two weeks, a barrel of Brent fell in price by more than 40% since the beginning of the year three times (8 January crude oil was trading around 72 dollars per barrel).
Russian Urals after the breakup of OPEC agreements+ in less than a month fell from 50 up to $ 13 per barrel by March 30. This is the minimum level of prices for Russian oil since 1999. In these conditions in Russia and decided to at least stop to increase production.
According to analysts, by the summer of to store the oil will be nowhere. Of the three largest world oil producers Russia has the least amount of available storage is approximately eight days. These figures are based on the volume of production that can be saved if the export runs out. Saudi Arabia has in reserve for 18 days, and in the US for 30 days. Now oil give free and sometimes even pay extra to consumers.
March 30, the state of the oil market, discussed by phone the presidents of Russia and USA Vladimir Putin and Donald trump. Amerikanscue the leader ahead of the meeting with Putin said in an interview that Saudi Arabia and Russia are “crazy” and he intends to raise the subject in conversation with the Russian President.
