Discounts on a Diet: Russian Urals Oil to India Nears Price Parity with Brent

Image Source: Baird Maritime

Russian Urals crude for delivery to India in August is offered at a record-low discount of only $1.70–$2 per barrel to dated Brent, the tightest spread since 2022, traders say.

Key Highlights:

Record Narrow Discount: Russian Urals crude discount to Indian ports has tightened to $2.25 per barrel for July shipments, and is quoted at $1.70–$2 for August, the lowest since the 2022 Ukraine war.

Supply Constriction: Spot Urals crude supplies are becoming increasingly tighter, leading Indian refiners—particularly those without term deals—to look for supplies elsewhere through tenders.

Higher Competition: Turkish refineries, particularly Tupras, bought more Urals after April, adding to competition with Indian buyers and reducing the discount.

Reliance's Dominance: Reliance Industries and Nayara Energy now control 45% of Russia's Urals exports, with Reliance possessing a 10-year tenor contract with Rosneft. This has further narrowed spot market availability for other Indian refiners.

India's Share: India remains the largest Russian seaborne crude importer, buying 80% of the Urals in the first half of 2025. Imports hit a 10-month high in May.

Global Drivers: Higher refining margins across the world have also increased Russian oil demand, with refiners attempting to drive throughput to its maximum.

Market Effect: The narrowing discount is compelling Indian refiners to cut back the buying of Urals and look for diversified sources, with rising interest in African and Middle Eastern grades.

Geopolitical Background: The reorientation comes after the EU sanctions and the G7 Russian oil price cap, which compelled Moscow to reorient the country's exports to Asia, and more particularly India.

"Russian flagship Urals crude oil discounts for July shipment to Indian ports declined to their lowest since 2022 as spot supplies have reduced, four market participants said on Friday."

— Reuters

References: Reuters, Economic Times, Business Standard