Russia is hoping to launch a futures market for its oil benchmark, the Urals blend.
According to a Reuters report, Russia has for years wanted to establish a rival oil futures market to the Brent benchmark, but Russian President Vladimir Putin is seeking to finally turn it into a reality. The motivation stems from the fact that Russia is forced to sell its oil at a discount to the widely traded Brent benchmark based in the North Sea.
The discount for the Urals blend has averaged $0.84 per barrel in 2015, and $0.99 per barrel last year. But that is sharply down from the discount ten years ago, which often widened to as much as $5 to $6 per barrel. Nevertheless, the discount has started to grow again in recent weeks.