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After US New Sanctions, Russia’s Oil Discount Hits 12-Month Low
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![Photo of Dariia Mykhailenko]( "Photo of Dariia Mykhailenko")
Russian crude oil is currently trading in Asian markets at its most significant discount relative to the Brent benchmark in one year.
This pricing trend is a direct result of key Indian and Chinese refiners reducing their procurement volumes following the implementation of new United States sanctions targeting major Russian energy producers, according to Reuters on November 6, citing industry sources.
The price differential for Russia's flagship Urals crude widened by $2, establishing a discount of approximately $4 per barrel below the Brent price for December arrivals. According to four trading and refining sources involved in the supply chain of Russian oil, this represents the widest discount recorded in approximately twelve months.
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Although the severity of the current discounts remains below the levels observed after the initial comprehensive Western sanctions in 2022 (when they approached $8 per barrel), they signify increasing financial pressure on Russian oil revenues, which constitute a vital component of the state budget.
The United States recently enacted stringent restrictions against Russian oil entities Lukoil and Rosneft, setting a definitive deadline of November 21 for all companies to finalize their existing transactions with these entities.
In response to these regulatory changes, primary Indian refiners—including Hindustan Petroleum Corp, Bharat Petroleum Corp, Mangalore Refinery and Petrochemicals, HPCL-Mittal Energy, and Reliance Industries—have paused all orders for Russian crude scheduled for December delivery. Collectively, these five entities account for an estimated 65% of India's overall Russian oil imports.
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At the same time, Swiss commodity trader Gunvor has formally withdrawn from its planned acquisition of international assets belonging to the Russian energy giant Lukoil.
The withdrawal was necessitated after the US Treasury Department publicly labeled Lukoil a “Kremlin puppet” and issued a clear directive that Washington would not approve the intended transaction. Gunvor announced the reversal just hours after the Treasury Department publicly accused the firm of acting in the interests of the Russian government and stated that it would actively block any transaction designed to generate profit from assets linked to the Russian energy sector.
Earlier, it was reported that Bulgaria is initiating measures to assume control of the Russian-owned Burgas refinery to safeguard the facility from potential operational disruptions stemming from US sanctions imposed on Russia’s two largest oil producers.
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