Moscow — The discount on the price of Russia’s Urals oil blend to global benchmark Brent widened by six percentage points this month to 23%, the Russian central bank said on Thursday in its review.The discount, though less severe than those seen after the initial wave of Western sanctions in 2022, reflect mounting pressure on Russian oil revenues – a critical lifeline for Moscow’s budget.
The United States last month imposed tough restrictions on Russian oil giants Lukoil and Rosneft.
The central bank said the discount stood at close to 15% in the second and third quarters, reaching 17% in October.
“We assume that the widening discount on Russian oil prices is a temporary phenomenon, as it was in 2023,” Alexei Zabotkin, the central bank’s deputy governor, said on Wednesday during a university lecture.
He added that Russian oil exporters were able to diversify their supply routes and adjust to the “new reality” in 2023, when the discount narrowed by the middle of that year.
Russia’s oil and gas revenue may fall in November by 35%, according to Reuters calculations, due to a lower oil price and stronger rouble.
The central bank also said that Russian oil output averaged 8.995 million barrels per day in the second quarter, rising to 9.38 million bpd by October after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, embarked on unwinding previous voluntary production cuts.
Despite the sanctions, Russia’s oil exports from western ports remain near peak levels, supported by OPEC+ output allowances and domestic refinery outages caused by Ukrainian drone strikes.
Reporting by Elena Fabrichnaya and Olesya Astakhova, writing by Vladimir Soldatkin/Guy Faulconbridge Editing by Andrew Osborn – Reuters
