Russian oil is now being sold in Asia at a lower price than Brent
Russian Urals crude has begun trading at a discount to the benchmark Brent grade in the Indian and Chinese markets due to declining demand from Asian refineries.
According to the agency, Urals crude for delivery in July and August is being sold at a discount of $2 to $3 per barrel relative to Dated Brent. By comparison, as recently as April and May, Russian oil was selling at a premium of $7–8 per barrel.
Traders attribute the shift in the price situation to reduced demand from Asian buyers. Some refineries have already built up the necessary stockpiles or switched to alternative oil grades.
In China, an additional factor has been the reduction in utilization rates at independent refineries due to declining refining margins.
According to Reuters sources, some Chinese companies even refused to purchase Russian oil for delivery in June. This weakens sellers’ positions during negotiations and creates the risk of unsold volumes accumulating in floating storage.
Source: Reuters.
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