Oil brand name to be changed in Kazakhstan due to sanctions against Russia

Kazakh producers decided to rename the brand of oil to "separate" from the Russian Urals.Reuters interlocutors cited the unwillingness to impose sanctions and the desire to facilitate sales as reasons.

Kazakh oil and gas company CNPC-Aktobemunaigas has changed the name of the crude oil it exports through Russian seaports to Kazakhstan EXPORT Blend Crude Oil (KEBCO) to "separate" it from Russian-produced oil, the company told REUTERS.

The decision was made "in connection with recent significant geopolitical changes <...> and in order to avoid the negative impact of changes on the export of Kazakh oil through Russian ports," the company explained, it will come into force in June 2022. 

The brand of oil will be renamed from Monday, May 6, four interlocutors in Kazakhstani oil companies, which are also involved in the transit of fuel through Russian seaports, told Reuters. Oil producers in Kazakhstan are determined to achieve a higher price for fuel and easier sale of it, if the documents clearly state that the oil was not produced in RUSSIA.

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One of the agency's sources specified that the Ministry of Energy of Kazakhstan intends to seek permission from the country's government for the official use of the new name.

Otherwise, Kazakh companies will face problems with opening letters of credit, an unnamed trader involved in the transit of Kazakh oil through Russian ports said in an interview with the agency. The Reuters interlocutor indicated that such a decision was “a necessary measure so that our oil does not fall under sanctions, and its name clearly indicates the country of origin in the documents.” Traders interviewed by the agency said that earlier, Kazakhstani oil had been mistaken for Russian oil more than once.

In total, 20% of oil supplied from Kazakhstan for export passes through Russian seaports - about 13.3 million tons last year, Reuters indicates.

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Reuters learned about the refusal of the state corporation of India to purchase Urals oil Business

Oil formerly produced in Kazakhstan was blended with oil from Russian fields to produce standardized export grades - Russian Export Blend Crude Oil (REBCO/Urals) and Siberian Light, wrote The Washington Post. According to the newspaper, Kazakhstan is allocated for export to tankers the same volume of oil that is supplied through the pipeline system.

At the end of May, the EU countries agreed on the sixth package of sanctions, which included the imposition of a partial embargo on the supply of oil of Russian origin. The EU leadership explained that the sea transport of fuel was banned, they concern two-thirds of Russia's oil exports. The sanctions assume that the import of Russian oil to the EU countries will be completely banned in six months, and oil products - in eight months.

In March, the average price for the Urals brand was $89.05 per barrel, the Finance Ministry said. Compared to March last year, the export value of this brand of oil increased by 40%, but the discounts in March compared to world prices reached double digits due to the introduction of international sanctions. The average price of international Brent futures in March 2022 was $112.5 per barrel, according to the BLOOMBERG terminal - the average discount to these quotes was about 20%. In April, the average cost of Urals was $70.52 per barrel, thus, the discount increased to 33%.
 

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