2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Urals oil is the main export grade of Russian hydrocarbons. The country's budget directly depends on oil of this brand, since it is calculated based on the cost of raw materials according to the current forecasts of economists.
General information
Urals oil is a mixture of two types of "black gold" - West Siberian and Volga. Mixing of grades takes place in the pipelines of the Transneft enterprise. Oil of this grade has a density of 30-32 API and contains an admixture of sulfur - about 1.3%.
Producers of this grade of oil are 5 leading Russian companies:
- Gazpromneft.
- Tatneft.
- Surgutneftegaz.
- Lukoil.
- Rosneft.
Producers are interested in improving the quality of "black gold" and are constantly working in this area. The Tatneft refinery, where raw materials will be purified from sulfur, is already at the final stage of construction.
Export of hydrocarbon raw materials is carried out through the Druzhba oil pipeline and the Black Sea port in Novorossiysk. ATIn the near future, Gazprom plans to put into operation a pipeline through which oil of this brand will be exported to the Asian region.
Since 2009, Urals has been trading as an independent oil grade on the New York (NYMEX) and Moscow (MICEX) commodity exchanges.
How the price of Urals oil is calculated
The cost of oil of a particular brand directly depends on its properties. Urals oil is a heavy product with a high sulfur content and a low concentration of gasoline and gas oil inclusions. The cost of the Urals variety is tied to the marker Brent. It is determined at a discount to the cost of Brent.
However, when compared to the American WTI, Russian Urals oil is of acceptable quality.
Future contracts
Urals oil is the most produced type of energy carrier in the world. Before the introduction of futures contracts, consumers and producers of this type of oil had great market risks. As practice shows, futures are an excellent component of the investment portfolio due to low risks and non-linear returns.
After the appearance of futures, the Russian producers of Urals managed to maintain the cost of raw materials at a decent level. This is also evidenced by the fact that its price sometimes rises above the price of marker Brent. Also, futures traded on the MICEX make it possible to perform all transactions with them under Russian law for rubles.
Russia's strategic energy source is Urals oil. Its price is directly tied to the cost of Brent North Sea marker oil and currently does not exceed $32 per barrel. Not so long ago, Urals futures contracts were put into circulation. This made it possible for investors to invest in a highly effective instrument, where the underlying asset is "black gold". Russian oil reserves are very significant. Over the years, the quality of Urals will certainly improve, as the government is interested in high prices for domestic hydrocarbons.
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