Urals prices are falling: discounts on Russian oil reach record levels
The cost of Russian Urals oil continues to decline, reaching a significant discount compared to the North Sea Brent due to falling demand in Asia and US sanctions affecting Russian oil companies.
Recent data shows that Urals prices in Russian ports have fallen to $36.61 per barrel, while the discount to Brent has reached $23.51 per barrel, the highest level since March 2023. Compared to the beginning of the year, the discount has reached almost a record $40, significantly exceeding the $12-13 at which Russian oil was sold before the sanctions. The price drop is a result of limited demand from China, India, and Turkey, countries that have reduced purchases. This situation forces Russian companies to act proactively by offering large discounts on their product.
US sanctions against major Russian oil giants, such as “Rosneft” and “Lukoil,” have resulted in economic pressure on the Russian energy sector. The situation is expected to worsen as November 21 approaches – the deadline for deal implementations after which restrictions will become stricter. This situation worsens the financial state of Russian energy enterprises, which are losing millions of dollars daily.
Experts note that the trend of declining demand for Russian oil could threaten the stability of the Russian energy sector and force the country to seek new markets. Moreover, the US is actively working to oust Russian gas from the European market, which could further increase pressure on the Russian economy.
| Date | Urals Price ($/barrel) | Brent Price ($/barrel) | Discount ($/barrel) |
|---|---|---|---|
| November 17, 2023 | 36.61 | – | 23.51 |
| March 2023 | – | – | Record |
