Argus Crude 2021. Global Markets and CIS

The Argus Crude 2021 — Global Markets and CIS online conference took place on 17 June.

Participants from 22 countries, including Russia, Kazakhstan, Switzerland, the Netherlands, the US and Colombia, joined the live broadcast.

The event was supported by general digital partner Gazprom Neft Trading.

The conference began with a presentation by Argus Chief Economist David Fyfe on the macroeconomic situation and global crude market environment. Fyfe noted that demand for crude is recovering gradually and with considerable variation from country to country. Movement restrictions continue to impede the rebound, he said.

Prospects for European benchmarks were reviewed by Argus Vice-President for Crude in Europe James Gooder, who highlighted the problems caused for benchmark Brent crude by a drop in production and liquidity. Gooder also spoke about options for expanding the reference base, identifying Argus North Sea Dated, WTI, WAF and Urals Med as possible additions to the BFOET basket.

Alexey Kornienkov, Head of Strategic Planning and Business Development at Gazprom Neft Trading, surveyed the prospects for Gazprom Тeft feedstock exports in the context of the green agenda. He noted that the Novy Port and ARCO grades ― the Arctic streams that appeared in 2014 and which reached full capacity by 2017 ― now account for most of the company’s crude exports. “In terms of their properties, production region and export logistics, both of Gazprom Neft’s Arctic crudes are unique and have won the trust of buyers. Also, digital logistics management and the use of green LNG tankers reduces the carbon footprint,” he said.

Alejandro Barbajosa, Argus Vice-President for Crude in the Middle East and Asia-Pacific, spoke about trends in the Asian market and observed that the coronavirus pandemic had spurred improvements to pricing mechanisms in Middle East crude markets in response to increased competition. The UAE is implementing market strategies to enhance the competitiveness of IFAD Murban exports to the Middle East, Barbajosa said, which provides a solid pricing basis for Asian crude markets, along with key benchmarks such as Dubai, DME Oman and INE.

The outlook for Russian crude production and exports was covered by Viktor Parno, Argus Vice-President for Business Development in the FSU. He said the Opec+ alliance’s production restrictions have had a significant impact on key grade Urals and that current supply is well down on pre-pandemic levels. The prospects for future Urals exports and output will depend on Opec+’s next moves, Parno concluded.

Alexey Davidenko, Deputy Head of the Fuel and Energy Complex at the Russian Energy Agency ― part of the Energy Ministry ― discussed the energy transition’s effect on the crude market. He covered the pandemic’s impact on oil product consumption, and its implications for investment in the oil industry.

The conference programme also addressed changes to China’s oil markets following the tightening of control over import quotas, as well as the outlook for US crude production and development of the US crude market.

Vitaly Shirin, Senior Sales Manager for Oil Derivatives with Sberbank’s Global Markets Department, concluded the conference by speaking about hedging price risks when selling crude in Russia.