# Russian Urals crude oil prices jump ahead of EU embargo Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-17 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Latest Update: Urals Oil Trading at Record Discounts in Meta Description: With EU embargo on Russian oil approaching, Urals crude prices soar in Europe. Limited time left for trading before restrictions take effect. URL: https://financedigest.com/russian-urals-crude-oil-prices-jump-ahead-of-eu-embargohtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-08-17t103947z1lynxmpei7g0d2rtroptp4ukraine-crisis-russia-oil-1736815447385-compressed.jpg) By Julia Payne LONDON (Reuters) – Russia’s key crude oil grade, Urals, has been trading at levels not seen in Europe since early March as refiners snap up the last barrels ahead of an European Union embargo, three traders familiar with the dealings said this week. Urals oil is still flowing to European refiners under term deals concluded prior to February 2022. From early December, EU companies will no longer be able to buy Russian seaborne crude while the Group of Seven is also studying a Russian [oil price](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") cap. Recent deals for September-loading Urals cargoes were done at benchmark dated Brent minus $22-25 a barrel on a delivered basis to Rotterdam, three traders said, up $7-$10 from previous estimates. For the Mediterranean, the price has risen to $18 below dated Brent on a delivered basis. The [prices are also two-tiered with crude from Russia’s](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors") state-owned Rosneft trading below that from private firms. As winter gets closer and EU oil embargo looms, we have one, maximum two [months to trade Russian](https://www.financedigest.com/russian-services-activity-shrinks-for-third-month-running-in-dec-pmi.html "Russian services activity shrinks for third month running in Dec -PMI") volumes, then it’s going to be too risky,” one of the traders said. While the discount has narrowed, [Russia will be making less per barrel than before as oil](https://www.financedigest.com/russia-unleashes-rockets-after-mariupol-ceasefire-eu-eyes-oil-sanctions.html "Russia unleashes rockets after Mariupol ceasefire, EU eyes oil sanctions") futures themselves have slid into the $90s a barrel. In June, when futures averaged $115 a barrel and dated Brent about $121, Russia [made $86 a barrel after taking into account](https://www.financedigest.com/investing-blockchain-technologies-made-simple-new-quantatex-alternative-investment-account.html "Investing in Blockchain Technologies made simple with new Quantatex Alternative Investment Account") its biggest discount. Taking average August so far, Russia will make around $78 a barrel. However, on a proportional basis and relative to other producers, while [oil prices](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") have dropped some $25 a barrel, Russian oil has only fallen $8. Urals, which is exported from Russia’s Baltic and Black Sea ports, has been trading at [record discounts](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") since Russia’s invasion of Ukraine due to Western financial sanctions on Moscow. Buyers have jumped on the cheap grade despite financial complications, with [China and India ramping up Russian oil purchases to record](https://www.financedigest.com/china-records-worlds-first-human-death-from-h3n8-bird-flu-who.html "China records world’s first human death from H3N8 bird flu -WHO") levels, traders said. The price of ESPO Blend, exported from Russia’s far-eastern port of Kozmino, has similarly rebounded. The grade [hit parity with the Dubai benchmark earlier this month](https://www.financedigest.com/german-bonds-set-for-worst-month-in-decades-as-inflation-hits-new-highs.html "German bonds set for worst month in decades as inflation hits new highs") from discounts of more than $20 a barrel. In July, the EU tweaked sanctions on Russia easing payment restrictions for [oil shipments from state-owned firms](https://www.financedigest.com/uk-oil-gas-firms-to-leave-years-worth-of-output-in-ground-with-tax-hikes-report.html "UK oil, gas firms to leave year’s worth of output in ground with tax hikes-report") Rosneft and Gazpromneft making it easier to deal with their volumes. While [Asia refiners have been the main support for Russian](https://www.financedigest.com/russian-and-chinese-jets-patrol-east-asia-skies-capping-biden-trip.html "Russian and Chinese jets patrol East Asia skies, capping Biden trip") barrels, they may become more cautious once the embargo comes into effect, traders said. (Reporting by Julia Payne and [Reuters](https://www.financedigest.com/indonesia-to-tighten-used-shoe-import-controls-after-reuters-report.html "Indonesia to tighten used shoe import controls after Reuters report") reporters; Editing by Tomasz Janowski) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---