Russian oil producers have shifted the trading cycle for the country’s flagship Urals crude blend and are selling cargoes further in advance to suit buyers in Asia, now their main market, four industry and trading sources told Reuters.

Urals was one of main grades in European refiners’ feedstock for years, but an EU embargo on Russian oil in 2022 following Russia’s invasion of Ukraine meant its sellers had to seek new buyers. India and China are now the top two consumers of Russian oil.

Due to their geographical proximity to consumers in Europe, Urals oil cargoes were typically sold on a spot basis 10-35 days prior to loading.

The Asian oil market has its own trading model, buying oil 1.5-2 months prior to tanker departure from the port of origin, traders said. Asian refiners normally get feedstock from far abroad, and the long tanker voyage means they have to arrange purchases far in advance.

Russia already sells its Far East grades – ESPO Blend, Sokol and Sakhalin Blend – in the Asian market on a trading cycle adapted for Chinese buyers. January-loading ESPO Blend cargoes, for instance, are being offered in the market now.

This year Urals sales are also being made further in advance, nearly in line with ESPO Blend, three sources said.

“The producer has sold all Urals cargoes for loading in December late in October, just one week after placing December-loading cargoes of ESPO Blend. Nowadays they are selling all the cargoes well in advance,” one trader dealing with Russian crude barrels said.

The synchronisation of trading cycles for Urals and alternative oil grades in the Asian market will increase the grade’s appeal to local buyers, the sources said.

“When traded earlier, Urals is more competitive,” another trader involved in Russian oil sales said.
Source: Reuters (Reporting by Reuters; Editing by Jan Harvey)