Russia

Russia is pushing ahead with efforts to establish its own price assessment for crude oil as it looks to replace what it sees as ineffective market assessments published by Western pricing agencies. The long-running initiative has taken on new urgency as established price reporting agencies such as Platts have left the country due to the war in Ukraine, and Europe’s trade in Urals has dwindled to almost nothing. Alexei Rybnikov, the head of St. Petersburg International Mercantile Exchange (Spimex), said the impacts of the embargo and price cap made it necessary to change the way Russia assesses oil prices for domestic taxes and tariffs. The current system relies on prices in Mediterranean and Rotterdam markets, but volumes in European markets have closed to most Russian cargoes following the EU's Dec. 5 seaborne crude embargo. Russia’s national price indicators are primarily used for calculating taxes rather than for establishing benchmark prices for trading purposes. Spimex officials have tried to establish Urals as a benchmark grade several times over the past two decades with little success. However, Russia’s Finance Ministry said it would consider using Spimex indexes in the first quarter, while continuing to use indexes from Argus when calculating the mineral extraction tax (MET) and other duties.