Russia's Urals oil prices for India stable in May, traders say

MOSCOW: Russia's Urals crude prices for loading in May to India have held stable for a third month in a row, trading sources said.

Discounts for spot Urals cargoes on a delivered ex-ship (DES) basis in Indian ports remain around $3.5-4 per barrel to dated Brent for May, unchanged from March and April, supported by anticipated lower supply and healthy demand, they said.

Oil loadings from Russia's Western ports are expected to fall by around one million metric tons in May from April as domestic oil refineries return from seasonal and unplanned turnarounds, while Turkey ramps up imports of Russia's flagship grade, providing support to Urals prices in Asia.

At the same time, sanction risks and weak refining margins at Indian oil plants are holding back Urals prices from further strengthening.

"Urals has found a certain balancing point. The prices seem to suit both sellers and buyers. If (Urals) prices go higher, it may scare off Indian clients," one of the traders said.

Freight rates for Aframax ships, which usually load some 720,000 barrels of Urals crude in Russia's Primorsk or Ust-Luga ports in the Baltic Sea for a one-way voyage to Indian ports, remain at around $8 million, also in line with rates for April-loading cargoes, the sources said.

In April, Russia sold Urals oil above $70 per barrel, exceeding a $60 per barrel Western price cap by around $10 as it has done since late last year.

On Thursday, Urals was priced around $66-68 per barrel for cargoes from Russia's Baltic and Black Sea ports despite a sharp fall in Brent late in April, Reuters assessments based on data from trade sources showed.