Russia Offers New Discounts on Oil: China Already Taking Advantage, India Still Considering
Following the imposition of US tariffs and threats to increase them if Russian oil continued to be imported, the Russian government has begun actively implementing price strategies to maintain and even expand its presence in the global oil market.
Notably, Russian companies are offering new discounts on Urals crude oil, which China has already utilized, and India is contemplating resuming purchases.
According to analysts, the discount on Russian oil is reaching record levels, attracting more international buyers and opening new export opportunities for Russia.According to data from Argus and other sources, as of mid-August 2023, the discount on Urals compared to the Brent benchmark in the Primorsk port reached $12.16 per barrel, up from approximately $11.96 in late July.
In Indian ports, the discount increased to $2.61 per barrel, while for the ESPO grade for China, it grew to $4.81, double the previous levels.
This makes Russian oil increasingly attractive to buyers who had previously suspended imports due to US tariffs.Indigenous Indian refineries, which previously purchased around 2 million barrels daily, are now reconsidering resuming purchases, as the new discounts improve their competitiveness.
Political decisions, including the Alaska summit and the temporary halt of tariffs in Washington, also influence these price changes.Experts suggest that these measures could negatively impact Russia’s revenues: with Brent prices around $66 per barrel, the average price for Urals has dropped to about $54–55.
Consequently, annual revenue from the oil sector might fall below 8 trillion rubles, which could significantly affect Russia’s financial stability and budget plans.