Argus Brent Sour (ABS) is a crude price index designed to be a reference in the market for sour (high-sulphur) crude in Europe. It was launched in the daily Argus Crude report in August 2022 at the request of market participants who were looking for a price signal following the disappearance of Russian Urals crude from most of Europe in the first half of that year. ABS is based on a basket of North Sea crudes, with the lowest-priced grade setting the index each day.

Russia’s main export grade medium sour Urals quickly became unwelcome in the European spot market after the start of the conflict between Russia and Ukraine in late February 2022. Urals prices crashed to all-time lows of more than $40/bl below the North Sea Dated benchmark before open trade dried up entirely. Price indications for Urals that began to emerge in late July that year were volatile, still heavily discounted, and linked to Asian economics rather than European.

The Urals situation removed a mainstay of Europe’s crude supply and also a key source of price discovery. Urals had been used as a price benchmark for medium sour crude for decades. It was a crucial index for refiners seeking to understand the price spread between medium sour and light sweet grades, and for exporters of sour crude to Europe from the Middle East and elsewhere, which looked to Urals as their principal competition and guide for pricing.

Urals’ disappearance from the open market led to calls for a substitute index. While there is no other crude that is of exactly the same quality or volume, or as widely refined as Urals was, there are several North Sea sour alternatives, and ABS is based on a basket of these grades. The resulting index will be a vital reference for the market and is likely to evolve as the transparency of trade in Urals substitutes increases.