Russian oil prices have continued to decline as major buyers India and China significantly reduce their purchases of the commodity, signaling potential economic pressure from the approaching U.S. sanctions. The price differential for Urals crude, compared to Brent crude, has widened to $23.51 per barrel, the largest spread since March 2023, reflecting a growing gap between global benchmarks and Russian oil prices.
Analysts suggest that the reduced demand from major buyers is a direct response to the impending U.S. sanctions, which are set to take effect in July. This decline in prices is expected to impact Russia’s oil revenue, which has been a critical source of income for the country’s economy. The situation highlights the growing isolation of Russian energy exports and the shifting dynamics in global energy markets.
The market response has been cautious, with traders assessing the potential impact of the sanctions and the subsequent effects on global oil prices. The widening discount for Urals crude may also influence Russia’s export strategies and its ability to maintain its market share amid the tightening sanctions and geopolitical tensions.