China believes future of Urals brand of crude

Chinese companies are interested in trade with deliverable futures for Urals oil, SPIMEX Exchange expects to launch this mechanism in autumn. The issue is planned to be discussed during the Russian-Chinese Intergovernmental Commission in May. This is the first official confirmation of the interest of foreigners in futures on Urals - an instrument, on the basis of which Russia wants to create an independent benchmark price on export oil. But analysts estimate the prospects of the futures with caution, as the volume of the future trading is unclear.

Chinese companies consider participation in future auctions on deliverable futures of Urals, a draft report of the Russian-Chinese Intergovernmental Commission on Energy for the meeting, scheduled for the end of May. "The parties came to an agreement that they would consider the possible parameters and volumes of contracts, pricing mechanism of  which could be based on the results of trading with deliverable exchange contracts on oil exports, concluded at SPIMEX", - the document says. Thus, it is not only about the Chinese participation in the futures trading, but also the use of quotations for determining the price of long-term contracts for the purchase of oil. Despite the streamlined formulations, this is the first confirmation of the interest of foreign buyers of Russian oil in the new instrument of its sales.