Russian oil prices have plummeted as global demand for Urals crude continues to decline. India and China, two of Russia’s largest oil importers, have significantly reduced their purchases ahead of the U.S. sanctions deadline, creating pressure on Russia’s energy exports. This trend has led to a sharp widening of the discount for Urals crude, with the gap against Brent crude reaching $23.51 per barrel — the largest spread since March 2023.
Analysts suggest that the declining demand reflects strategic moves by India and China to mitigate the impact of Western sanctions on their energy markets. The reduced purchases are also seen as a hedge against potential fluctuations in global oil prices during the sanctions period. As a result, Russia is facing a dual challenge of both economic sanctions and the shrinking market for its crude oil, which could have long-term implications for its energy sector.