Russian oil prices have dropped as India and China reduce their purchases of crude oil ahead of U.S. sanctions deadlines, marking a significant shift in the global energy market. The discount on Urals crude, which is Russia’s main export grade, against the Brent crude benchmark widened to $23.51 per barrel, the largest gap since March 2023. This development reflects the ongoing challenges Russia faces in maintaining its oil export volumes amid international pressure and sanctions.
India, the world’s third-largest oil importer, has been a major buyer of Russian crude, but recent reports indicate a sharp decline in purchases. Similarly, China, the second-largest importer, has also scaled back its imports, signaling a strategic adjustment in response to U.S. sanctions. These actions have had a direct impact on the pricing of Russian oil, pushing it further below the Brent benchmark and reducing the revenue Russia earns from its oil exports.
The reduction in demand from key buyers has further complicated Russia’s efforts to stabilize its energy sector. Analysts suggest that the widening discount indicates a lack of buyers willing to pay the full price for Russian crude, which is a clear sign of the economic pressure exerted by Western sanctions. As the U.S. sanctions deadline approaches, the situation could either lead to a further decline in prices or a rebound if alternative buyers emerge to offset the reduced demand.