India gets a record discount on Urals crude: what is the reason?
24 November 15:13
Russia is offering Indian refineries Urals crude oil at the lowest price in two years after Washington imposed sanctions on Russia’s largest producers. This was reported by Bloomberg, according to "Komersant Ukrainian".
According to the agency’s sources, the discount on Urals has increased to $7 per barrel relative to the Brent price, including delivery. The offer applies to deliveries that will start in December and arrive in India in January.
Prior to that, the discount price was about $3 per barrel, which is half as much.
Sanctions have reshaped the market
After the US imposed sanctions on Rosneft and Lukoil last week, most Indian refiners stopped buying Russian oil. The trade, which had been booming since Russia’s invasion of Ukraine in 2022, has almost come to a standstill.
However, the sharp drop in prices is changing the situation: some Indian refiners are ready to return to purchases, but only if the sellers are not on the sanctions lists. This significantly limits the market’s capacity – only about 20% of the available shipments are not connected to sanctioned companies.
India is looking for alternatives
Following the US sanctions against Rosneft and Lukoil, which added to the restrictions against Gazprom Neft and Surgutneftegaz, India has shifted its focus to suppliers from the Middle East and other regions.
Washington claims that its sanctions pressure is working: according to the US Treasury, Indian and Chinese banks and refineries have begun to comply with the ban on working with Russian oil giants.
Logistics remains stable
Urals continues to be shipped from western Russian ports. However, the prospects for exports will largely depend on whether Russia can secure a sufficient number of buyers who do not risk falling under secondary US sanctions.
