【Wen / Observers Daily, Ruan Jiaqi】

According to Bloomberg, due to a decrease in demand from Indian refiners for Russian Urals crude oil, the price of this Russian oil heading to China has fallen to a historical low as competition among buyers has weakened.

U.S. media cited informed trade sources saying that this week, the trading price of Urals crude oil was about $10 per barrel lower than the Brent crude futures. By contrast, in August of last year, the price of this crude was about $1 per barrel higher than the spot Brent crude.

The report pointed out that overall trend data show that Russia's crude oil exports have recently dropped to their lowest level since August of last year, due to increasing difficulties in delivering crude oil to its main buyer, India.

Following U.S. sanctions on Russian producers such as Lukoil and continued pressure from the Trump administration, India's willingness to purchase Russian oil has clearly cooled down. As the world's third-largest crude oil importer, India's crude oil imports last month (December 2025) fell to the lowest level in more than three years.

"This puts pressure on the pricing of Urals crude oil, while also creating opportunities for Chinese refineries, despite the fact that Urals crude oil is traditionally the main crude oil variety exported to China," reported. According to the report, Urals crude oil is exported from western Russian ports, which are far from Chinese refineries, which usually procure more crude oil from the East Siberia-Pacific Ocean pipeline (ESPO) crude oil from eastern ports.

Data from the ship cargo tracking company Kpler shows that due to India's reduced purchases, the floating storage of Urals crude oil at sea has surged to over 13 million barrels, setting a record high of at least ten years. Nearly half of the crude oil is stored in the Arabian Sea, with nearly one-fifth located in the Singapore Strait and the Yellow Sea, making it relatively easy for Chinese buyers to access these crude oils.

Russian offshore petroleum inventory surges. Bloomberg charting

Kpler data shows that this year, China's imports of Urals crude oil have risen to about 400,000 barrels per day, reaching a new historical high; similar growth trends were also reflected in data published by the shipping data company Vortexa.

Bloomberg previously quoted a senior crude oil analyst from Kpler stating that Russian sellers have significantly reduced the price of Urals crude oil to China, with prices even lower than Iranian crude oil. This price advantage is attracting strong interest from refining companies in Shandong, where most of China's private refineries are concentrated.

"China is obviously an ideal alternative buyer for this batch of crude oil," the report also mentioned. Indonesia, which has land-based crude oil reserves, is also a potential sales market.

According to vessel tracking data compiled by Bloomberg, in the four weeks ending January 18, Russia's crude oil exports amounted to 3.16 million barrels per day. This figure decreased by about 700,000 barrels per day from the peak before Christmas, and also decreased by 260,000 barrels per day compared to the same period ending January 11.

Last month, the volume of crude oil delivered to Indian ports from Russia dropped sharply to about 37 million barrels, equivalent to a daily import of 1.2 million barrels, the lowest level since November 2022.

This number is also lower than the daily 1.78 million barrels in November, when importers were rushing to complete purchases before the U.S. imposed sanctions on two major Russian oil exporters.

According to a report from India's Business Standard, as of December 2025, India's ranking among Russian fossil fuel buyers slipped to third place, with Turkey surpassing India to become the second-largest buyer.

However, The Guardian noted that the decline in India's oil imports from Russia seems to be a short-term fluctuation caused by compliance issues rather than a complete abandonment. Currently, four of India's seven major refineries still primarily use Russian crude oil as their processing raw material. Reliance Industries, India's largest Russian oil buyer, recently had procurement actions, which also proves that there is still some demand in the market.

Homayoun Falakshahi, chief crude oil analyst at Kpler, also pointed out that export data shows that several new crude oil exporters have emerged within Russia by December. These companies may act as shadow intermediaries between Russian oil giants and refineries in countries like India.

"This indicates that Russia is trying to restructure its supply chain. New companies leading exports may only take two to three months. At that time, most of the crude oil will be supplied by non-Russian oil companies, non-Lukoil companies," he said, "Clearly, Russia will not let the sanctions take effect; they will do their utmost to circumvent them."

Falakshahi added, "For Indian companies that are still willing to buy Russian oil, this is a risk worth taking, as it can save nearly $4 billion in a year. We expect that at least public sector imports in India will soon recover to previous levels."

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Original: toutiao.com/article/7598089048897159680/

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