Little-Known Trader Wins Zarubezhneft Online Auction

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A little-known trading company, Euronova Energies, has won an online auction held by Russia's state-controlled Zarubezhneft on a St. Petersburg Mercantile Exchange (Spimex) platform for Urals crude oil barrels. It is the second time that the trader has picked up Zarubezhneft volumes through Spimex. Big trading companies so far remain skeptical about the auction mechanism, conceived to help promote the Urals export grade as a benchmark. Swiss-registered Euronova Energies will load 100,000 metric tons of Urals from the Baltic Sea port of Primorsk in each of May and June, trading sources told Energy Intelligence. The company previously won rights to load 100,000 tons of Urals from Primorsk in March in another Zarubezhneft auction, which it later resold to Lukoil trading arm Litasco. Traders say Euronova Energies is a small trader from the former Yugoslavia zone, which includes Bosnia and Herzegovina, where Zarubezhneft has its Brod refinery. The trading firm is likely known to Zarubezhneft from its activities in the region. So far, Zarubezhneft is the only company selling Urals crude through Spimex online auctions, which were conceived to establish liquidity for Urals trading and form a market price for Urals to back its case to be a new benchmark. Zarubezhneft sold its first 300,000 tons of Urals last year, while another 300,000 tons were sold for January-March. Other takers for Zarubezhneft barrels reportedly include Gunvor and BB Energy and Atlantis Commodities Trading. Sources say that big traders are participating in the Urals auctions to study the mechanism, but the price is not attractive, with most preferring to stick to their existing patterns of work with Russian majors. Apart from Zarubezhneft, only Tatneft is also offering volumes, although petroleum products, not crude, through Spimex auctions (NC Apr.15'21).

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