Russia’s Urals crude is now being sold to Indian refiners at the steepest discount seen in at least two years.
The drop follows US sanctions on key Russian producers Rosneft PJSC and Lukoil PJSC, which have disrupted a trade that expanded rapidly after the start of the Ukraine conflict in 2022.
People familiar with the matter said the price of Urals for Indian buyers has fallen to a discount of up to $7 a barrel to Dated Brent on a delivered basis. They said the offer applies to cargoes loading in December and arriving in January.
Before these sanctions, the discount for Urals was around $3 a barrel.
Most Indian refiners avoided placing new orders for Russian crude that would reach the country after the sanctions on Rosneft and Lukoil took effect last week. This pullback significantly slowed a supply stream that had given India access to steady, cheaper oil.
However, the situation has begun to shift.
With Urals crude now priced lower, some Indian refiners are again considering purchases from non-sanctioned sellers, according to the people familiar with the discussions. They noted that only about one-fifth of the available cargoes are being offered by entities not on the sanctions list.
The new US measures add to earlier sanctions on Gazprom Neft PJSC and Surgutneftegas PJSC. In response to the restrictions, Indian refiners have been sourcing more crude from other regions, including the Middle East.
The sharper discount now being offered marks a major change in the trading dynamics between India and Russia, driven directly by the tightening of US sanctions.