Although Russia has large oil reserves, it has never played the main role in the global oil market. What is more, it may even lose the position it has at the moment.
The fact is that Norwegian Johan Sverdrup is becoming one of the largest oil fields in the world, thus displacing Russia’s Urals. Norway began producing a new oil benchmark in October 2019. Characteristics of Johan Sverdrup almost match the ones of Urals. This means that the price of both types of oil will be almost the same. European countries are already losing their interest in Urals oil. Although the Norwegian oil is included in the Brent basket, Johan Sverdrup futures will still be more expensive than Urals futures. Market experts warn that buyers, who earlier preferred Russian oil, are now switching to the Norwegian benchmark. In fact, the rival of the Russian oil is more attractive for buyers due to its lower price and smaller overhead costs for its delivery. However, Norway’s triumph will hardly last long. Analysts emphasize that oil production in Norway is five times lower than in Russia. Thus, Russian oil is unlikely to leave the market.
