OREANDA-NEWS. November 25, 2016. The St Petersburg International Mercantile Exchange (Spimex) will launch its Urals crude futures contract on 29 November.

Spimex is offering the Urals contract for crude delivery on a fob Primorsk basis. The contract — which will trade in 1,000 bl lots — is for physical delivery, meaning market participants will need to collect a total of 720 lots in order to take, or make delivery of a standard 100,000t shipment of Russian export blend Urals. Initial physical deliveries will take place in March 2017.

Contracts will be traded daily and expire 21 days before the first calendar day of the relevant front-month for physical delivery.

The Russian government hopes the contract will be the foundation for a new crude benchmark, which it sees as the best way to guarantee that Russian crude sells at a "fair" price. The requirement to take 100,000t cargoes is too rigid, some market participants have said.

Spimex president Alexei Rybnikov has said achieving 10,000 contracts a day within a year or a year and a half will be "a good level of liquidity".