By Rhod Mackenzie
A more accurate and correct methodologically now is to link the price of Russian export Urals oil to the Dubai Crude grade, which is the main benchmark for oil supplies to Asian countries, and not to the North Sea Brent grade. This opinion was expressed to journalists by the president of the SPIMEX Alexey Rybnikov.
“Now, given the current situation, it is a methodologically more correct to focus on Dubai,” he said. — It is clear that Dubai is very much focused on Brent. But Dubai's pricing removes the basis risk and the risk of an additional layer of financial instruments between the Persian Gulf and the North Sea."
At the same time, Rybnikov noted that this does not mean that it is impossible to continue working with the price of Urals pegged to Brent. “It is possible, because the binding to Brent is still obtained with a correction factor,” explained the head of the SPIMEX. — There are risks between them, these are different bases. It can be counted either way. The Ministry of Finance chose Brent, which is traditionally close to it. But methodologically, of course, it would be cleaner to do it in Dubai. But it doesn't matter."
The head of the SPIMEX also stressed that the stock exchange sees a serious redirection of Russian oil flows through the OTC transactions registration system. “And indeed the flow goes to the east: India, China, Southeast Asia. It is known that pricing in this region is traditionally tied to Dubai. The oil of the ESPO brand (traded in the east of Russia and goes mainly to Asian markets - approx. TASS ), for example, is also tied to Dubai, ”added Rybnikov.
Alexei Sazanov, the Deputy Finance Minister of the Russian Federation, said in February that he did not see much difference to which reference grade of oil to tie the price of Urals to - Brent or Dubai. According to him, these two varieties correlate with each other.
This article originally appeared in Russian at angi.ru