The price of Russian oil has declined significantly, with the discount for Urals crude against the Brent benchmark widening to $23.51 per barrel, the highest spread since March 2023. This sharp drop comes as India and China reduce their oil purchases ahead of the U.S. sanctions deadline, which is expected to come into effect soon. Analysts suggest that the reduced demand is leading to lower prices for Russian oil, although the exact impact of the sanctions on the market remains uncertain.
India has been one of Russia’s largest oil buyers, but recent reports indicate that the country is scaling back its imports in preparation for the U.S. sanctions. Similarly, China has also cut shipments, citing supply chain issues and the need for diversification. These shifts in purchasing behavior are causing a ripple effect in global oil markets, with traders anticipating further volatility as the sanctions date approaches.
Industry experts warn that the drop in oil prices could have a broader economic impact, particularly on Russia’s budget and its ability to fund military operations. However, some analysts remain cautious, noting that the long-term effects of the sanctions are not yet clear. The situation continues to evolve, and the global market is closely watching developments as the deadline for the sanctions approaches.