Russia Will Probably Decrease the Export Duty on Most Crude Shipments by 3.7 Percent on July 1, 2011

Base Oil Report: As per reports and information from our sources,Russia will probably decrease the export duty on most crude shipments by 3.7 percent on July 1, the first decline since October after oil prices fell.

The standard duty will probably drop to $445.10 a metric ton ($60.72 a barrel) from $462.10 a ton in June, according to Bloomberg calculations based on Finance Ministry data. Oil taxes are at the highest this month since a record $495.90 in August and September 2008. The discounted rate for oil shipped from 19 east Siberian fields and from two Caspian Sea deposits may decline to $205.80 a ton from $217.50 in June. OAO Rosneft's Vankor project, TNK- BP's Verkhnechonsk and OAO Surgutneftegas's Talakan have had to pay full taxes since May 1 and remain taxed at the full rate next month, according to the Finance Ministry's proposals.

Brent and Urals, Russia's benchmark export blend, have slid in the past month on speculation fuel demand may slow with economic growth. Russia sets its export duties based on Urals prices from the 15th day of one month to the 14th day of the next. Urals averaged $112.65 during the past monitoring period. A special tax on gasoline that Putin imposed starting May 1 to fight domestic shortages may be broadened to cover naphtha and other light distillates in July, Sakovich said. The duty may be lowered to $400.50 a ton from $415.80 this month. That is 90 percent of the crude duty. The export tax on light oil products may be cut to $298.20 a ton from $309.60. The duty on heavy products may be lowered to $207.80 a ton from $215.80.