Russia increases oil discounts for China to record since the beginning of the war
7 December 2025 19:11
Russia has sharply increased its oil discounts for China to find buyers for barrels that have been abandoned by state-owned and private refineries.
According to Reuters, citing traders, Russian ESPO Blend crude oil supplied to China for December loading is being sold in Chinese ports at a record discount of $5-6 per barrel to Brent, "Komersant Ukrainian" reports.
At the end of September, Chinese refineries were buying ESPO Far Eastern oil at a price higher than Brent by $0.5-1. Thus, after the imposition of US sanctions against Rosneft and Lukoil, the main Russian grade for the Chinese market fell by $5.5-7 per barrel, or about 10%.
According to Reuters sources, not all ESPO Blend shipments from December found buyers, and the trading companies through which the supplies were made could have suffered losses: they bought the December volumes in the fall, at higher prices, and now have to sell them much cheaper.
Oil discounts that Russia has been providing to China since the beginning of the war in Ukraine have saved Chinese refineries $20 billion in recent years, Rosneft CEO Igor Sechin said earlier. Russia “has a unique resource base” and is ready to use it to supply China, Sechin emphasized.
Despite the discounts, Russian oil flows to China are declining: in November, sea deliveries to the Chinese market fell below 800,000 barrels per day, the lowest since February 2022, Kpler analysts calculated. Compared to October, exports fell by 30-40%, or 400-500 thousand barrels per day.
China’s state-owned refineries have a conservative policy on sanctions and probably want to see how Indian refineries will act or wait until the dust settles, says Kpler analyst Johannes Raubal.
However, if there are no penalties for violating the sanctions, they may return to purchases, but not directly from Rosneft and Lukoil, but through a network of intermediaries, Raubal believes. If Russia is able to quickly establish new supply schemes, China and India will continue to import from the Kremlin, benefiting from discounts, the expert emphasizes.
