Europe complains about falling quality of Russian oil

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Complains are coming from Europe about falling quality of Russian oil “Urals”, said the head of LUKOIL Vagit Alekperov last Thursday.

Urals blend is made by mixing different types of crude oil produced in Russia. The most demanded (light and low sulfur) oil is produced from mature, and gradually dwindling oil fields of Western Siberia.

After considerable volumes of Russian light oil were diverted to the East, consumers in the West started suffering from poor quality, said Alekperov.

“We were already contacted by Hungarian and Finnish consumers who asked to pay attention to the quality of our oil. Tomorrow I’ll be addressing the government to bring attention to this problem,” – said the head of LUKOIL.

The problem is that the Russia’s consumers’ refineries were designed to use Russian oil.

Now they have to buy crude oil to mix it with Urals in order to return to the necessary quality.

In November, Poland agreed to the purchase of light oil in Saudi Arabia. The first shipment has already arrived in Gdansk, and it could be the first step towards signing of a long-term agreement.

As it was stated by the head of “Rosneft” Igor Sechin, the situation is worsened by the fact that Saudi Arabia offers substantial discounts, which, in fact, is the dumping against Russian oil on Russia’s “traditional” markets.

According to the analytical department of the Central Bank, the discount of Russian oil to European benchmark grades is growing: initially it was $1.5-2, but this fall it increased to $3.35.

According to “Naans media”, a barrel of Urals on FOB Primorsk was 2339 rubles on Thursday, which is $33.11 with the current exchange rate.

The light Brent oil blend was traded in London at $37.37 per barrel.

Source: finanz.ru