Shell reportedly agreed to purchase Russia's benchmark Urals crude from Trafigura Group at a record discount, confirming that many in the market continue to avoid the country's oil but that at a bid still remains if the price is low enough.
"The trade is the first such deal in a window organized by S&P Global Platts since Russia invaded Ukraine. While it underscores the deep discounts Russia is going to have to sell its oil at, it's also the first indication that it will still find some willing buyers in companies that are reliant on Urals crude," Bloomberg News reported.
While there are no sanctions on exports of Russian crude or refined oil products, demand for Russian oil has evaporated since the attack on Ukraine.
Some typical buyers have moral objections to purchasing oil from Russia.
Some countries have restricted access to ports for Russian ships or ships containing Russian oil.
Others fear the reputational damage that could come from trading with Russian oil producers.
With the war in Ukraine raging, the trading unit of Shell can't resist cheap oil, buying Urals crude at the record discount of minus $28.5-a-barrel to Brent.
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Friday, March 4, 2022
Shell Buys Russia's Urals Oil at Record Discount
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