The central bank of Russia says that the discount on Russian Urals oil prices has increased to 23% by November.

In its latest review, the Russian Central Bank said that the discount between the price of the Urals oil blend and Brent global benchmark has increased by six percentage points to 23% this month.

Although the discount is less severe than what was seen in the first wave of Western sanctions, which began in 2022; it still reflects mounting pressure on Russian Oil revenues, which are a vital lifeline for Moscow’s budget.

Last month, the United States imposed strict restrictions on Russian oil companies Lukoil & Rosneft.

The central bank reported that the discount was close to 15% during the second and third quarterly periods, with 17% being reached in October.

Alexei Zabotkin said in a lecture at a university on Wednesday that "we assume the discount is temporary, just as it was 2023."

He said that Russian oil exporters had been able to adapt to "the new reality" by 2023 when the discount was reduced in the middle of the year.

According to calculations, the revenue from Russia's oil, gas and coal could fall by as much as 35% in November due to a weaker rouble and a lower price of oil.

The central bank said that the Russian oil production averaged 8,995 million barrels a day in the second-quarter, and increased to 9,38 million bpd in October, after the Organization of the Petroleum Exporting Countries (OPEC+) began unwinding voluntary production cuts.

Despite sanctions, Russia’s oil exports remain at near-peak levels. This is due to OPEC+ production allowances, and refinery shutdowns caused by Ukrainian drone attacks. (Reporting and writing by Elena Fabrichnaya, Olesya Astakhova; Guy Faulconbridge editing by Andrew Osborn).

(source: Reuters)