The 10 Urals crude loading positions left unfilled in the official loading schedule for the Russian Baltic Sea ports of Primorsk and Ust-Luga in June are due to be allocated by June 15, a source at national pipeline operator Transneft said Monday.
The source said that seven positions were left free in the June schedule at Primorsk and three at Ust-Luga because of the recently introduced "profit achievement" scheme in the country, according to which Russian oil producers can opt for the most profitable export destination for their crude stocks.
"There is now a 'profit achievement' scheme for the Western crude export route for producers, and people are getting used to it," said the Transneft source, adding that the scheme had been introduced alongside the startup of the new Baltic sea terminal at Ust-Luga, giving producers a choice as to their export route.
In addition, the source cited higher crude export volumes planned to Poland and Germany in June under the Russian second-quarter export schedule as another reason behind the Baltic positions remaining unallocated.
"When the Q2 export schedule was being produced, there was still no clarity regarding Ust-Luga exports. Now looking at higher export volumes to Germany and Poland, we can see some imbalance in the overall volumes in June," the source said.
The rising price of Dated Brent, meanwhile, could lead to higher export volumes from Russia, as it will be more profitable for producers to send more crude for export than keep it in the domestic market, said one trader.
"Flat price is rising, so we could see more exports of Urals," said the trader.
Other traders, however, said they expect to see a drop in the export volumes planned into Northwest Europe next month, with a cancellation of some of the unfilled positions, which in turn, should provide support to Urals crude differentials in the north.
"It is bullish news I believe [for the Urals market]. Usually some empty positions are canceled and the program could be shorter," said one trader.
