Russia Forced to Sell Oil to India at $22 a Barrel as Buyers Balk at Sanctions

Russia has sharply increased discounts on its oil sold to India, with some cargoes recently priced as low as $22–25 per barrel, as Moscow struggles to retain buyers amid tighter US sanctions, the Financial Times (FT) reported on January 29.

According to a former senior executive at a Russian energy company cited by FT, refiners in India have begun refusing certain shipments due to sanctions imposed by the administration of US President Donald Trump, forcing Russian exporters to offer unprecedented price cuts to clear unsold volumes.

In some cases, discounts on Russian Urals crude exceeded $25 per barrel and, for individual cargoes, approached $40.

Official data from Russia’s Ministry of Economic Development shows that the average export price of Urals crude fell to $39 per barrel in December, the lowest level since the COVID-19 pandemic, according to The Moscow Times.

Prices declined further in January, dropping to $34–36 in mid-month and recovering slightly to $36–38 by the end of the month.

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War in Ukraine

Are Sanctions Working? Russia’s Oil Revenue Collapse Says It All

Dec 17, 2025 19:34

“If the US tightens sanctions even further, the only way we will be able to sell oil is through pipelines,” the source told FT. Outside the pandemic period in 2020, Russia last sold oil at comparable prices of $22–25 per barrel in 2003, highlighting the scale of the current downturn.

Russia’s oil production in 2025 has also resulted in the 512 million tons produced, the lowest production levels since 2009, when Russia produced 494.2 million tons. Even during the pandemic in 2020, production was slightly higher, at 512.7 million tons.

Previously, it was reported that Russia’s largest private oil producer Lukoil has asked the Russian government for budget support after a sharp fall in prices for Russian crude, which is now selling at discounts of nearly 50% to global benchmarks.

Ukrainian drone strikes on Russian refineries and fuel infrastructure have reduced Russia’s refining capacity, particularly in western regions. This both reduces Russia’s ability to refine and store oil and increases pressure to export crude quickly—often at lower prices—because there is insufficient domestic storage and refining capacity.

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