Russia will provide further discounts on its Urals crude blend in order to defend its market share on its traditional market, Europe, as other grades have been increasingly been flowing into the region, a government source said.
The assertion is yet another sign of Russia's willingness to cling to its markets. It is also a clear message before a meeting of the Organization of the Petroleum Exporting Countries on Dec. 4 that Russia is not willing to cut its oil production.
Traders and shipping data show that oil from Saudi Arabia, Iraq and other Middle Eastern countries has recently been shipped to Europe for the first time in many years as a fight for global market share has intensified amid declining prices.
"We will fight for our market (in Europe). We will increase the discount on Urals. But don't think that the Saudis will easily occupy refineries which have traditionally used our oil, it's not technologically easy," the source told reporters.
However, the steps to further cut oil prices will put additional strain on the Russian budget, which generates halve of its revenues from oil and gas sales.
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