Discounts on Russian Urals oil in India have exceeded $10 per barrel due to weakened demand and alternative supply options.
The price of Russian Urals oil in Indian ports has sharply decreased, reaching over $10 per barrel in comparison to Brent benchmark oil. This is attributed to a reduction in demand from refineries and an increase in alternative supplies. According to Reuters, from March to June, Russian oil was sold at a premium to Brent due to supply disruptions related to the conflict in the Middle East. However, after the resumption of exports by producers from the region and Iran, the market stabilized, and interest in Russian raw materials significantly decreased.
Asian refineries have gained more purchasing options, resulting in reduced interest in Urals. Moreover, China has increased its raw material purchases from the Middle East, creating additional pressure on the Russian market. Currently, China and India remain the main buyers of Russian oil, accounting for the majority of its exports.
Russia, amid a decline in domestic refining caused by Ukrainian drone attacks on refinery infrastructure, has increased Urals exports to record levels. India, in turn, takes advantage of the affordable price of Russian raw materials, refining it into gasoline, which it subsequently exports, including to Russia, to mitigate fuel shortages in its domestic market.
