Iranian
export ban forces buyers to line up for Russian crude
As
the sanctions against Iran came into force on July 1, many European
refineries rushed for Russian Ural crude to fill their stocks,
pushing the oil prices up to $100 per barrel.
RT,
10
July, 2012
Urals
is a high sulphur mix of heavy, high-oil of the Urals and the Volga
region with light oil from Western Siberia. It has the same quality
as Iranian crude, which makes it suitable replacement, experts say.
Many
European importers have already replaced Iranian crude with that of
Saudi Arabia, Iraq or Kuwait, but those who failed to do it
beforehand are buying Urals as it is widely available in the spot
market, the Financial Times reports. In January when the sanctions
against Iran were discussed, France’s Total and Repsol of Spain
also rushed to buy Urals to cut dependency on Iran.
“Russian
crude supplies are more secure as they come through a pipeline.
Russian exporters provide guarantees,” said Vyacheslav Bunkov,
chief analyst at Aton Investment. “Meanwhile the situation in the
Gulf could lead to supply disruptions, if military action begins.
That’s why Urals became more attractive than Brent”.
Due
to the rush Urals is trading 52 cents per barrel over Brent, while it
used to trade $1.60 cheaper per barrel in mid-June. Brent prices also
rallied supported by seasonal high demand and reduced supply because
of Norway’s strike and recent disruption in Libya.
Meanwhile
some European companies including Repsol and Cepsa of Spain have also
purchased extra Iraqi barrels to replace Iranian crude. European
refiners bought about 450,000 barrels a day of Iraqi Basra crude in
May, up from an average of 100,000 barrel per day earlier in the
year, according to the International Energy Agency.
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