As progress of talks between Brussels and Washington about creating the Transatlantic trade and investment partnership (TTIP) increasingly, voices on bonded for Europe conditions of the possible agreement. Some experts believe that the New world seek to impose your Old oil benchmark is the WTI (West Texas Intermediate). This, in particular, said Vice-President of the international independent pricing Agency Argus Media Vyacheslav Mishchenko in an interview with PRIME.
“We are now very aggressively developing export infrastructure of the United States. Many market participants said that in the coming years, the United States will have a new international centre for trading oil, WTI will become the reference strain for the Atlantic basin, replacing the usual Brent,” — said Mishchenko.
Of course, the prospect of a TTIP — in fact, the world’s largest free trade zone is still very vague. In summer, France and Germany openly declared that the negotiations on the Transatlantic partnership has failed because of U.S. attempts to promote to the European market prohibited for the goods and the reluctance of Washington to compromise in the controversial clauses of the agreement. However, to change the benchmark oil in Europe and already there has been serious conditions.
Brent is the main reference varieties for markets in the Western hemisphere — is rapidly losing its value. The impact of the oil fields in the North sea, the main region of oil production in Western Europe is rapidly decreasing. Data petroleum Directorate of Norway, the largest Western oil powers — show: from 2000 to 2015 production in the country fell in two times — up to 78.5 mln tons (including condensate). Even more depressing situation in the UK.
“WTI claims to be the global standard. The market for North sea mixture, known as Brent, is in the doldrums. Physical production falls, including the Brent field”, says Mishchenko.
The fish gave its name to the European reference oil of the Marche, is almost exhausted. Leading to the production of Shell in the last year began to develop a plan for the withdrawal of deposits from use. So Brent is now is a mixture of varieties produced in the North sea, including oil fields, Forties (UK), Oseberg and Ekofisk as (Norway). Because, for example, in Argus Media, this mixture is referred to as BFOE.
In other agencies and companies of the European reference oil of Brent continue to call. However, now the European oil market frantically looking for a replacement of North sea standard. The Americans, meanwhile, aggressively promote your WTI.
If the US is selling the same West Texas crude oil as a global benchmark, then repeat the situation 30-40-ies of XX century. Then on the world market was dominated by a cartel of the “Seven sisters”, which included the American Exxon, Mobil, Chevron, Gulf, Texaco, British Petroleum and Anglo-Dutch Royal Dutch Shell. These companies set a very simple pricing system: the price of oil is determined on the basis of costs of production in the United States and transportation to the consumer from the Gulf of Mexico. In this case, “sisters” did not care where, in fact, carried out the extraction and was used for the shipment. Using this principle the pricing of seven oil giants rigidly controlled the entire oil market.
Why not Urals?
Is there an alternative to WTI as a new European standard? Experts answer this question in the affirmative, nodding that the amount of presence on the market of the Old world at the forefront of the Russian mark Urals. Many international price Agency is seriously considering the inclusion of our export mix in the basket of North sea grades.
In the end, the Transneft JSC from Russia to Europe in 2015, was sent to 154,2 million tons of oil. The Russian variety is exported to Europe through the pipeline “Druzhba”, as well as from the Baltic ports of Primorsk and Ust-Luga and shipped from Novorossiysk. At the same time, all exports of oil from the U.S. last month barely reached 700 thousand barrels (about 95,5 thousand tons) per day, equivalent to an annual volume of less than 35 million tons. With half of this oil is exported for refining in neighbouring Canada and to refineries in the Caribbean. Therefore, the influence of American crude to the European market compared to the Russian Urals is negligible.
Nevertheless, Vice-President of the Agency Argus Media is not optimistic about the prospects of Urals.
“Voices of experts about the need to add in the [European] “basket” of Russia’s Urals, whose sales exceed the volume of North sea grades. But for a variety of reasons, including and political, this topic removed from the agenda”, — skazal Mishchenko.
Maybe do not agree with him in the leadership of the St. Petersburg international Mercantile exchange (SPIMEX). In October they plan to start the bidding parties with the Urals export through the Russian terminals on the Baltic sea. Is it for the approval of the Russian brand as the new oil benchmark for Europe, time will tell.
