Russia prepares to 'untie' dollar from oil

Russia has began negotiations to launch futures for the Urals oil. The Saint Petersburg International Commodity Exchange (SPIMEX) is preparing to launch a futures contract on the Russian export blend of Urals and it invites international trading companies to work on the creation of the platform. President SPIMEX Alexey Rybnikov told Bloomberg that they are holding talks with a number of market participants, but at the same time he refused to name specific foreign companies.

Thus, it is planned to solve two problems at once: to increase revenues from the sale of Urals and "get rid" of the payments for the sale of oil in US dollars. Now, the low-grade oil of Urals is being sold with a discount to the standard international North Sea Brent.

The creation of own futures market will allow Russia to improve the pricing mechanism of Urals and domestic companies will receive additional revenues, Rybnikov said. He added that Russia's largest oil companies, including "Rosneft", "Lukoil" and "Gazprom Neft" support this initiative.

It is necessary to provide a number of conditions, including open access to companies registered beyond the Russian Federation, in respect of selling of Russian commodities and derivatives before the beginning of the project, RBC reports. Now the Bank of Russia is preparing special amendments to the legislation.

The idea of ​​creating Russia's own benchmark was in the air during a long period of time. It appeared before the opening of an oil exchange in St. Petersburg, Associate Professor at RANHiGS Ivan Kapitonov said in an interview with a 'Vestnik Kavkaza' correspondent.

"This idea existed in academic circles and it was regularly discussed among political circles. After creating an oil exchange in St. Petersburg, markets were obliged to sell a certain amount of oil and oil products through the exchange. However, they unwillingly did it due to the fact the main amount of oil and oil products were sold in accordance with direct contractual relations in Russia. Beyond Russia they were sold quite successfully,'' he explained.

The leading analyst of the National Energy Security Foundation Igor Youshkov was skeptical in respect of the idea of ​​creation of our own benchmark, explaining that this initiative is beneficial just for PR rather than real economy.

"Certainly, it is an absurd to sell Brent, taking into account that last year the production of the North Sea was over, i.e. the platform was dismantled and taken away. In fact, there is no oil in the Brent oil field anymore, but a 'conditional' sort of oil, as well as several other varieties remained, including Russian Urals,'' he said.