Russia is set to further reduce its overseas supply of Urals Crude oil in July due to an unexpected spike in domestic demand as COVID-19 restrictions ease, according to Reuters.
“Demand for gasoline is ramping up fast, we have to increase runs or there will be nothing to supply to our petrol stations,” a source with a major Russian oil company told Reuters.
The increase in demand coupled with the finishing of refineries’ seasonal maintenance is expected to further increase the appetite for the crude from processing plants.
Exports of Russia’s Urals oil has been aggressively cut in May and June in accordance with the OPEC+ cuts and are on track to decline to the lowest levels in months by the end of June, to 4.4 million tonnes from the Baltic ports and 1.2 million tonnes from the Black Sea’s Novorossiisk.
According to estimations, oil companies may have roughly 1.4 million tonnes less oil for export as Russia’s primary offline refining capacity is expected to decrease to 1.6 million tonnes from 3 million tonnes in June.