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OIL: Urals/Dubai Crude Benchmarks Could Strengthen If Russia Sanctions Lifted

OIL
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An end to the Russia-Ukraine conflict could strengthen Urals and Dubai benchmarks relative to Dated Brent if sanctions are lifted, Platts reports. 

  • Peace talks raise the prospect of more Urals volumes in Europe, which could in turn prompt buyers in China and India to seek barrels from Middle Eastern producers, according to traders cited by Platts.
  • Brent could weaken relative to Dubai if European refiners take Russian medium sour flows to maximize diesel output, according to Harry Tchiliguirian head of research at Onyx Capital Advisory, cited by Platts.
  • European refiners would bid less for North Sea sours like Johan Sverdrup and also buy less WTI, which would have to be discounted to be absorbed in Europe.
  • Incremental demand from India for medium sour would have to be sourced from the Middle East, according to Tchiliguirian.
  • The Urals discount to Brent was last assessed at $14.5/bbl on March 13, according to Platts.
  • A removal of sanctions on tankers carrying Russian oil would lower transportation costs and consequently reduce discounts on Russian crude by around $5/bbl, according to analysts at Renaissance Capital cited by Platts. 
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An end to the Russia-Ukraine conflict could strengthen Urals and Dubai benchmarks relative to Dated Brent if sanctions are lifted, Platts reports. 

  • Peace talks raise the prospect of more Urals volumes in Europe, which could in turn prompt buyers in China and India to seek barrels from Middle Eastern producers, according to traders cited by Platts.
  • Brent could weaken relative to Dubai if European refiners take Russian medium sour flows to maximize diesel output, according to Harry Tchiliguirian head of research at Onyx Capital Advisory, cited by Platts.
  • European refiners would bid less for North Sea sours like Johan Sverdrup and also buy less WTI, which would have to be discounted to be absorbed in Europe.
  • Incremental demand from India for medium sour would have to be sourced from the Middle East, according to Tchiliguirian.
  • The Urals discount to Brent was last assessed at $14.5/bbl on March 13, according to Platts.
  • A removal of sanctions on tankers carrying Russian oil would lower transportation costs and consequently reduce discounts on Russian crude by around $5/bbl, according to analysts at Renaissance Capital cited by Platts.