Argus Launches New Pricing for Russia's Urals Ahead of EU Embargo on Russian Oil

MOSCOW (Sputnik) - International pricing agency Argus launched in October a new system of price assessment of Russia's key export oil brand Urals based on prices in Russian ports, as Europe's pricing has become less relevant due to the embargo on Russian oil expected to be imposed by the EU, according to the agency's report obtained by Sputnik.

"In late July, Argus began a trial valuation of prices on Urals under FOB Primorsk, Ust-Luga and Novorossiysk bases. In early October, quotes on such bases were officially introduced after consultations with market players," the document read.

The agency noted that Urals prices in the European ports did not fully reflect the fair value of the Russian crude oil due to its decreasing exports to countries of the European Union and declining trade activity there. At the same time, there has been higher liquidity of oil trading in spot batches in the Russian ports, Argus added.

On October 7, the European Union introduced its eighth package of sanctions against Moscow which, among other things, sets a framework for capping the price of Russian seaborne oil exports at a level coordinated by G7 allies.

The measure will go into effect on December 5 for crude oil and on February 5 for refined petroleum products. Some EU countries, including Hungary, were excluded from such measures as they import Russian oil through pipelines.