Russia Intends to Raise Oil Export Duty by 7-9% in September 2009
OREANDA-NEWS. Export duties on crude oil could rise 7-9% to US237-241 per ton (US 32.5-33 per barrel), effective 1 September, reported the press-centre of OTKRITIE FC.
View: This duty hike would be higher than the one in August, when the crude export duty was raised by 3.5%. However, the price of Urals blend has climbed 8% since 1 July 2009. If the price of oil does not sink below the US 70/bbl mark in September, the netback export price could rise to US 29.5 (+11%). By contrast, if the price of oil remains at US 65 per barrel, the netback price could go down by 8-9%. However, we do not expect that a crude export duty hike would have a negative effect of on the 3Q09 financials of oil exporters.
Valuation: The average P/E for the Russian oil majors is equal to 9.9x. Russian oil stocks trade at a 10% discount on P/E to their EM peers, and at a 24% discount to international majors.
Action: We view this news as neutral for oil stocks.
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