Russian Ural oil discounts on the Indian market compared to Dated Brent have risen to the highest since March where as Russian Ural oil price before transportation at the Baltic ports and Novorossiysk have fallen to 55,71 and 56,46 USD per barrel.
The discount of Ural oil for delivery in July to India's West Coast compared to Dated Brent rose from 4,1 USD on June 12th to 4,35 USD per barrel on June 19th. The discount is the highest it has been since March 2026 and this is due to the weakening demand for oil. The Ural oil price on the Indian market dropped by 8 USD over the period to 75,86 USD per barrel. This is because companies in India and China expect an increase in oil supplies from the Persian Gulf countries as well as the lifting of sanctions on Iran at least temporarily. Importers have been postponing deals to see the outcome of US Iranian negotiations. According to S&P Global Commodities at Sea from June 18 to June 24 18 non-Iranian tankers left the Strait of Hormuz carrying approximately 30 million barrels of oil. The US Treasury also issued a license to purchase Iranian crude and petroleum products until August 21. Iranian oil shipments including exports from Iran decreased by 1,6 times in May compared to February to 2,65 million barrels per day. The lifting of US sanctions can allow Iran to sell oil accumulated in floating storage facilities in the Persian Gulf as well as that in tankers in Southeast Asia. The discount on Russian Ural oil from the Baltic ports rose by 0,9 USD to 24,5 USD per barrel in the week ending on June 19th. In Novorossiysk the discount rose by 0,55 USD to 23,75 USD per barrel for 140 000 ton shipments. Ural oil prices at the ports in the Baltic and in Novorossiysk dropped by 8,73 USD and 8,38 USD to 55,71 and 56,46 USD respectively as global prices dropped. Weak demand from Chinese refineries remains an additional factor putting pressure on the price of Russian oil due to their low profitability and low fuel consumption in China. The discount on Ural oil delivered to China's Shandong Province remains at $1 per barrel. Price for Russian oil there including delivery costs fell 7,1 USD to 76,86 USD per barrel. The market is already anticipating increased oil supplies from the Middle East including Iran which is why oil prices are under pressure. Supply volumes from the region could gradually exceed even pre-conflict levels as evidenced by the growing number of tankers leaving the Persian Gulf. Russian analysts believe that the increase in discounts is primarily due to weakening demand in Asia. Asian refineries are redistributing inventory, seeking alternative feedstocks and in some cases reducing refining due to low margins. There is also the factor of China no longer buying oil to put into its strategic reserves. The Indian and Chinese markets for oil are closely linked so weak demand in one allows buyers to negotiate further discounts in the other. Also the expiration of the US license for the purchase of Russian oil is putting pressure on the price of Russian oil. Russian experts don't rule out an increase in the discounts on Russian oil due to competition from other countries including on the Indian market. Rising global demand, the stabilization of logistics and lower freight costs are what can cause a reduction in the discount. Russia's seaborne oil exports in May 2026 decreased by 1% compared to April 2026 to 4,03 million bpd. Shipments to India fell 46% to 1,21 million bpd and exports to China rose by 1% to 905 000 bpd. A reduction of Russian refinery capacity due to Ukrainian strikes can lead to higher oil exports. Source kommersant.ru
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