The main grade of oil that Russia exports into Europe is now being offered for sale at a hefty discount, signaling a sharp drop in demand, according to analysts at Independent Commodity Intelligence Services.
They calculated that a barrel of Urals crude is trading $10.60 below the price of benchmark Brent. That’s the biggest gap on record.
If traders continue to shun Russian oil, that could drive up prices around the world as competition heats up to secure barrels of crude from other sources.
Russia exports about 5 million barrels of crude per day. About half of that goes to Europe.
“We were already in a scenario where supply and demand were quite tightly matched,” said ICIS expert Richard Price. “There wasn’t much room in the system for disruptions.”