Russian oil prices have dropped significantly as major buyers India and China have cut their purchases of Russian crude ahead of the U.S. sanctions deadline. The discount on Urals crude compared to the North Sea benchmark Brent crude widened to $23.51 per barrel, marking the largest gap since March 2023. This development reflects growing economic pressures on Russia as global demand for its oil declines.
The reduction in purchases by India and China comes amid heightened scrutiny of Russia’s energy exports, with the U.S. imposing sanctions on Russian oil imports. Analysts suggest that the weakening demand is a direct response to the geopolitical tensions and the potential economic fallout from the sanctions. As a result, Russian oil producers are facing a significant challenge in maintaining their export volumes and revenue levels.