The first futures contract in New York, whose size is 1,000 barrels, envisions Free On Board oil supplies in Russia's port of Primorsk in the Baltics.
The new blend, a third crude brand to trade on the NYMEX, after WTI and Brent, will replace Urals as Russia's price index used for calculating supply prices, export duties and mineral extraction tax. It is expected to fetch a higher price than Urals, generally priced at a $5-6/bbl discount to Brent, as its quality is much nearer to Western standards.
Free On Board (FOB) means that the seller pays for transportation of the goods to the port of shipment, plus loading costs.
Deputy Economic Development and Trade Minister Kirill Androsov said Friday the sale of REBCO in New York will bring in a total of $3 billion for Russian oil producers annually.
