MOSCOW, July 15 (NNN-AGENCIES) — Russia’s government has made a plan to create a national oil benchmark next year, as it seeks to protect itself from efforts by the West to restrict the flow of petrodollars to the country.
Key Russian ministries, domestic oil producers and the central bank plan to launch oil trading on a national platform in October, according to a document. Russia will work to attract foreign partners to buy oil, with the aim of achieving sufficient trading volumes to establish a pricing benchmark between March and July of 2023, according to the plan.
Russia has been trying to create its own oil benchmark for more than a decade, with little success. Some of the country’s producers have sold batches of crude for export at the Moscow-based Spimex commodity exchange, but the volumes traded haven’t been high enough to establish a globally accepted benchmark.
The nation’s ambitions have intensified after its invasion of Ukraine prompted a swathe of Western oil sanctions. Last month, Group of Seven nations agreed to urgently explore how to curb Moscow’s oil revenue by imposing a cap on the price of its oil.
Russia’s primary export grade of crude oil, called Urals, is typically bought and sold at a price expressed as a discount to North Sea benchmark Brent crude. Since the invasion, that discount has widened significantly as sanctions reduced the appeal of Urals. Nevertheless, the broader rally in global prices has meant the flow of petrodollars into the Kremlin’s coffers has continued unabated.
The proposal is still at its early stage and the governmental bodies have yet to determine whether the nation needs any additional legal frameworks for the oil trading at the platform, according to the document. — NNN-AGENCIES