Saturday, 16 November 2019

Russia makes fresh effort to take control of its oil price | Financial Times

Russia makes fresh effort to take control of its oil price | Financial Times:

Russia is hoping to stamp its authority on the oil market with a renewed effort to set the price of its crude exports.

The country’s energy ministry has supported initiatives by St Petersburg International Mercantile Exchange, known as Spimex, to determine the price domestically. The exchange is preparing to experiment with online crude auctions, which are to be launched by the end of the year.

Currently, Russian exporters sell oil mostly to trading firms, often over the phone, and agencies get pricing estimates from market participants.

Under the new programme, which is echoed in other oil-producing nations, Spimex is planning to offer an electronic platform for buyers and sellers to transact. In return for its service, the exchange will get access to physical prices, allowing it to calculate an average based on real transactions rather than estimates.

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