MOSCOW (TASS) — The price of the Russian oil export blend Urals in Europe is above $55 a barrel for the first time since last February on the back of expected contraction in Russian and Saudi oil deliveries, S&P Global Platts told TASS.

Urals oil prices were above $50 per barrel in mid-December 2020 and climbed to more than $55 a barrel on January 12, with a minor decrease to $54.75 a barrel in Northwestern Europe CIF Rotterdam by January 25. Urals was traded in the Mediterranean (CIF Augusta) at $54.9 a barrel on January 25.

Iain Stevenson, Managing Editor, Crude Oil, EMEA, says:

Urals differentials versus the forward Dated Brent benchmark are attempting to stage a recovery from the slump observed at the end of 2020, despite the recent upward trend in crude flat prices. The full provisional February loading program across Primorsk, Ust-Luga and Novorossiysk shows shipments will be 4.3&nbspmln metric tons in total across the month, 1.74 mln metric tons lower than in January.

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A reduced stream from Russia, combined with Saudi production cuts which could see European buyers lose a significant proportion of their monthly allocations, means that the market is trading around some considerable pressure from the supply side. In the context of a short sour crude environment in Europe, Urals continues to perform.

Early in January, Saudi Arabia made a decision to further reduce oil production by 1 mln barrel daily in February-March 2021. Russia and Kazakhstan were provided with an opportunity to ramp up production of oil by 150,000 barrels per day within these two months.