OIL: Urals Discount Surges Following US Sanctions on Russia
The Russian Urals price has fallen below the $60/bbl price cap for the first time since December, Bloomberg said, with Argus data showing discounts of nearly $16/bbl following US sanctions announced in January.
- The price decline is a sign that sanctions imposed by the US Office of Foreign Assets Control could be impacting Russian oil revenues.
- Freight rates for vessels moving Russia crude have risen, adding to delivery costs as buyers in India and China are wary of deliveries on sanctioned vessels.
- Urals at the point of export is getting cheaper compared with the discount for delivery into India. The discount for Urals at the Baltic Sea port of Primorsk to North Sea Dated was $15.70/bbl on Feb. 5 while the discount for delivery into India was $13/bbl, Argus data showed.
Source: Bloomberg
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AUSTRIA: Foreign Min Schallenberg To Take Over As Interim Chancellor
Der Standard reports that Foreign Minister Alexander Schallenberg will, for the second time in his career, be sworn in as interim chancellor. The transition will come on Friday 10 January and comes after incumbent Chancellor Karl Nehammer announced that following the collapse of coalition talks he would step down as head of the conservative Austrian People's Party (ÖVP) and chancellor.
- The Schallenberg administration will be a caretaker gov't in the same nature as the Nehammer administration that has been in place since the September 2024 federal election. It will engage in the day-to-day running of gov't, but will not be able to propose new legislation or make major policy decisions.
- The ÖVP also confirms that acting federal chair Christian Stocker will give a statement to the press at 1400CET (0800ET, 1300GMT). This comes a day after Herbert Kickl, leader of the right-wing populist Freedom Party of Austria (FPÖ) confirmed that he had accepted the mandate from President Alexander van der Bellen to form a gov't and would be inviting Stocker to begin exploratory talks.
- Stocker has, at least tacitly, signalled that the ÖVP under his leadership would be willing to at least start negotiations. There remain risks for the ÖVP in taking on the junior coalition role, with little opportunity in such a position to boost their credentials ahead of the next federal election.
Chart 1. Austrian National Council, Seats
Source: parlament.gv.at, MNI. N.b. Numbers in brackets indicate change of seats at 2024 election.
SONIA: Call fly buyer
SFIM5 96.15/96.45/96.75c fly, bought for 2 in 2k.
EQUITIES: EU Bank call buyer
SX7E (21sty Mar) 155c, bought for 3.10 in 6k vs ~2k at 150.00.
