MOSCOW, Feb 20 (Reuters) - Kazakhstan has separated its oil exports from those of Russian crude by launching its own KEBCO brand, but sanctions against Moscow are still putting pressure on the price of Kazakh oil pumped through Russian pipelines, data shows.
The Central Asian nation launched KEBCO (Kazakhstan Export Blend Crude Oil) last June to distance its exports from the Russian Urals blend amid Western sanctions.
The export route via the Russian port of Ust-Luga has long been a secondary one for Kazakhstan which ships most of its crude through the Caspian Pipeline Consortium, but it is an important option for many Kazakh producers.
Although physically the Urals and KEBCO blends are the same, Urals now trades at a $30 discount to Brent BFO-URL-E, while KEBCO is about $20 more expensive than Urals URL-KBC-NWE.
That still leaves a sizeable discount to Brent which market players say is due to a number of sanctions-related factors: traders are cautious about buying from Russian ports, some vessels avoid them altogether, and freight and insurance have become more expensive.
As a result, it is currently more profitable for Kazakh producers to sell crude domestically than to ship it via Russia’s Ust-Luga port, traders say. The equilibrium will change if Brent crude climbs above $90, one trader said. Brent was trading at around $83 a barrel on Monday. (Reporting by Reuters; Editing by Susan Fenton)
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