Now here’s Urals is trading at a discount of 0.13 dollars per barrel to the reference variety. In August, as expected Argus, Urals marine supply will grow by more than 40%, to 1.1 million barrels a day from 770 thousand barrels in July. This may reduce the price of Russian variety from the traditional discount to Brent at $ 2-3, but will restore fallen nearly 30% in July demand. If this happens, the oil market in Europe will return to pre-crisis condition, with the only difference that the volumes are far from the same.

the Reason for the decline in demand for Urals – the high price that prevailed in may and June due to limited supply of medium-weight oil in Europe. As a result, European buyers began to gradually abandon in favor of the Urals, the Caspian, North sea, middle East and American oil.

When OPEC+ 15 July, took the decision to increase production by 2 million barrels per day, it was expected that additional volumes of oil production will be used for the processing inside the countries of the Alliance. In fact, according to preliminary estimates, in August the volume of domestic oil refining in Russia will rise by only 54 thousand barrels per day and increased production by 400 thousand barrels. The remaining 346 thousand barrels with a high probability will be exported.

According to experts, the price of Urals will return to normal for the lag of the cost of Brent, as well as recover the share of Russian oil on the European market. Equally important will play a further increase in oil production under the deal, OPEC+. “Compared to Brent, which offer on the market in reality does not exist and it is not governed by the Covenant OPEC+, the volume of Urals will increase, which will inevitably lead to the return of the discount on Russian oil”, – said a leading analyst “Discovery Broker” Andrei Kochetkov.