The premium for KEBCO, Kazakhstan’s oil shipped via Russian ports, to the Urals oil price fell to $13.15 per barrel in May from $21.05 per barrel in early April on the rising price of Moscow’s flagship grade and weak demand in the European crude market, Reuters data showed and traders said.

“Urals differentials (to dated Brent) on CIF Rotterdam have strengthened significantly over the past month, while offers to sell KEBCO at premium levels to Brent did not spark demand in buyers. Grades such as WTI, Basrah and CPC Blend also traded at weaker levels recently,” one trader said.

Urals differentials have been gradually improving since February 2023, according to Reuters estimates. Over this period, the calculated CIF Northwest Europe BFO-URL-NWE discount to dated Brent narrowed by $12 per barrel to levels around minus $20 per barrel.

“The premium of KEBCO to Urals narrowed in May as much as the Urals price had improved,” another trading source told Reuters.

The surge in demand from Asian refiners, mostly in India and China, in recent months supported Urals differentials.

Despite the fact that KEBCO is not under EU sanctions, it remains at risk of lower demand as it shares loading outlets with Urals oil and is pumping through the Russia’s Transneft oil pipeline, traders said.

As there are no difference in quality between KEBCO and Urals Kazakhstan gave its oil transited via Russia a new marketing name KEBCO (Kazakhstan Export Blend Crude Oil URL-KBC-NWE) since June 2022 to avoid issues with marketing.
Source: Reuters (Reporting by Reuters, Editing by Louise Heavens)