Oil is one of the types of export raw materials, which plays an important role in both the Russian and global economies in recent decades. What brand of oil does Russia sell?
History reference
Even in ancient times, people knew about the properties of oil. It was collected from the surface of the water or the earth's surface. But it was not used so widely. In the 19th century, when the kerosene lamp was invented , the need for this raw material increased significantly. It was then that methods began to be developed for drilling wells in the oil and gas strata of the earth's crust. After the discovery of electricity, oil demand decreased.
However, at the end of the 19th century, an internal combustion engine was developed, which served as an impetus for the development of the automotive industry. At first, only rich people could afford to buy a car, but then they became available to almost all segments of the population. In this regard, the demand for petroleum products has increased sharply. To this day, oil remains a valuable natural product, since it provides the ability to move a person on land, water and air.
Oil production in Russia
In modern Russia, there has been a steady increase in oil production since 2000, but in the past 5 years, the pace has slowed down somewhat, and in 2008 it even fell slightly.
Since 2010, oil production has exceeded the level of 500 million tons per year. And to this day she holds above this bar. For two consecutive years, namely in 2009 and 2010, Russia ranked first in oil production worldwide. But since 2011, the first in this industry has become Saudi Arabia.
The Russian Federation is one of the most significant participants in the global economy. The share of Russian raw materials in world oil production is more than 12%. Oil is exported both to Europe and to the countries of the Asia-Pacific region.
In our country, oil production is carried out by vertically integrated companies. In total, there are 9 such large enterprises. They produce more than 90% of all oil in the country. There are more medium and small oil producing enterprises — there are about 150 of them. The state-owned company Gazprom produces about 2.5% of all crude oil, while independent enterprises give the leading role in this matter.
What is the meaning of vertical integration? If you imagine the whole cycle of oil production and processing of raw materials in the form of a chain, then the combination of these links will be integration. The sequence of the process is as follows:
- oil exploration, well drilling, field infrastructure development;
- oil production and transportation of the obtained raw materials:
- receipt of petroleum products and their transportation;
- sale of petroleum products (marketing).
This technology structure allows you to achieve a number of advantages over competitors:
- guaranteed supply of raw materials and the sale of petroleum products;
- significantly reduced risks associated with changes in market conditions;
- production is optimized.
The Rosneft and Lukoil enterprises are the absolute leaders in our country in oil production.
General information about oil brands
The properties of oil, which is extracted in various climatic zones, are very different. By definition, oil is an oily viscous fluid with a saturated black color. But it's not always the case. The color of "black gold" has many gradations - from tan and transparent to black.
The structure and melting point are also variable. There are varieties that harden in the middle band in summer, while others remain liquid even at very low temperatures.
After the oil is extracted from the well, it must be transported to the place of processing.
So what brand of oil does Russia sell and how many such varieties exist?
In our country, 7 grades of oil are produced and exported, while in the world there are more than 20. The main export grade is Urals. The cost of each particular brand is determined by the discount or premium in relation to the marker variety. Basically, the brands Brent, WTI, Middle East Crude are used for this.
If we talk about the dynamics of the price of Brent, then over the past 3 years it has significantly fallen in price from $ 120 to $ 38 per barrel. Today its price is around 40 dollars.
Urals
This variety has the largest share in Russian oil exports - 55%.
Urals brand oil appeared on the world market in the 70s.
It is a grade with a high content of sulfur impurities. Urals is formed when raw materials are transported via the Transneft pipeline from fields located in the Urals, Volga Region, and also Western Siberia.
Urals brand oil is exported through deliveries via the Druzhba pipeline to Europe. Also, exports are carried out through ports in the Baltic (Ust-Luga and Primorsk) and the Black (Novorossiysk) seas. The geography of supplies is very limited, so this variety cannot be a priori marker.
The cost of Urals is determined by a 1% discount in relation to Brent.
What brand of oil does Russia sell besides Urals?
Rebco
The name of this variety is composed of the first letters of Russian Export Blend Crude Oil. Actually, this is the same Urals that is supplied through Primorsk. Price quotation is determined by a 1.3% discount relative to Brent. Traded on the New York Mercantile Exchange. The export share in the total volume is about 25%.
SiberianLight
This is a brand of light raw materials.
Extraction is conducted in the Khanty-Mansi Autonomous Okrug.
It is transported via the Transneft pipeline, where it is mixed with Volga and Ural oil, resulting in Urals. However, only a small fraction of West Siberian oil is traded as an independent brand. Mostly deliveries are made through the port of Tuapse.
The price of Siberian Light brand oil is determined by a discount of 0.5% of the cost of Brent.
Sokol
High quality low sulfur Sakhalin oil. The price of Brent crude oil is lower than at Sokol. Cost is determined by a premium of 7.5% for Dubai. Production is carried out as part of the large-scale Sakhalin-1 project. Export is carried out through the village of De-Kastri, which is located in the Khabarovsk Territory.
Vityaz
The brand of oil produced in Russia is also on the island of Sakhalin, like Sokol. The cost of this variety is tied to the Dubai brand. The cost of Vityaz oil is determined by a premium to the grade of Dubai at 6%. Export is carried out through Prigorodnoye settlement in the Sakhalin Region.
Espo
Russia has been trading ESPO brand oil relatively recently.
The variety received its name because it is transported via the ESPO pipeline of the same name ("East Siberia - Pacific Ocean" or "East Siberia - Pacific Ocean"). The project for the construction of this pipeline is quite promising, since it involves the supply of “black gold” to the People’s Republic of China and the Asia-Pacific region.
This brand of oil produced in Russia is a mixture of raw materials from various fields that are already in operation. Its quality significantly exceeds the well-known Urals variety.
Cost is determined by a premium of 3.5% to Dubai Crude.
Arco
This variety is produced in the Arctic at the Prirazlomnoye field, which is located in the Pechora Sea. This is the only offshore field in the world where development is carried out at a 60-km distance from the coastal zone on a fixed platform. Oil reserves of more than 70 million tons are extracted from the shelf.
Brent oil prices are lower than on ARCO.
Several grades of oil are produced on the territory of our country. However, only 7 are traded to Brent oil. What brand of oil does Russia sell on the international trading exchange? The main export varieties are Urals and Rebco. Their share in exports is more than 2/3 of the total. Varieties Vityaz, ARCO, Sokol, Siberian Light and ESPO are also exported. The most promising is the ESPO variety, which in the near future may become a marker, as its deliveries are carried out in the countries of the Asian region.