Discounts for Russian Urals oil cargoes loading in June widened slightly to dated Brent from the levels achieved for May-loading volumes on a delivery basis at Indian ports, three traders said.

June Urals cargoes are trading at discounts of $2.70-3.10 a barrel to dated Brent on a DES (delivered ex ship) basis at Indian ports, compared to a $2.50-3.00 per barrel range for May cargoes, the traders said.

“Urals prices are little changed for June barrels or just a bit weaker compared to May volumes,” one of the traders said, adding that higher availability of alternatives was starting to weigh on Russian oil differentials.

Oil producer group OPEC+ agreed to accelerate production hikes for a second consecutive month in May, raising output in June by 411,000 barrels per day. The decision is expected to increase oil supply this year.

Spot premiums for Russian ESPO Blend crude oil loaded from the state’s Far East to Asian markets fell in June from May amid ample oil supply expected in the region.

The outright price of Urals oil on a FOB (free on board) basis in Russian ports remains below the $60 per barrel Western price cap given a weakened Brent price, limiting Russian oil sellers’ revenues.

India is still the largest buyer of Russian oil by sea. Recently the state allowed more Russian insurance companies to provide cover for vessels carrying oil to its ports.
Source: Reuters