imageMOSCOW: Urals crude differentials in the Mediterranean have scaled to a six-month high on limited supply from Novorossiisk in July, while the gap between prices in Europe's north and south made arbitrage feasible, traders said on Thursday.

"North-south arbitrage has opened, and it can provide support for Urals in the Baltic," one trader said, while another trader said that the arbitrage was feasible only on paper. Belarus is looking for crude grades other than Russian Urals for its refiners, three industry sources said.

Russia has cut allocations of crude oil exports to Belarus for July-September by 40 percent from April-June amid a stand-off over Russian natural gas supplies.

Traders say Russian supplies to Belarus could fall by even more than 40 percent in July compared with June amid lack of clarity over deliveries.

Exports of Urals from the Baltic Sea ports will fall to 6.5 million tonnes in July, down by 100,000 tonnes from revised loading data as of Wednesday, as Rosneft cancelled it's loading position in Primorsk on July 18-19, that was taken over from Lukoil, traders said.

Unipetrol says Unipetrol and PKN Orlen have signed contracts for Russian export blend crude oil deliveries from Rosneft.

A supertanker with Iranian crude is heading towards Poland's Baltic Sea port of Gdansk, trade sources said and ship-tracking data showed, as Iran continues to claw back market share after the lifting of Western sanctions.

In the Platts window, Litasco bought from Vitol an 80,000-tonne cargo of Urals crude from Novorossiisk on July 21-25 at dated Brent minus $1.20 a barrel, according to market sources.

On Wednesday Litasco bought from Vitol a cargo of the same size on June 20-24 at dated Brent minus $1.40 a barrel.

In the Baltic Vitol was offering in the Platts window a 100,000-tonne cargo of Urals on July 19-23 at dated Brent minus $1.90 a barrel before withdrawing.

There was no activity for Azeri light and CPC Blend in the Platts window on Thursday, traders said.

Copyright Reuters, 2016

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