Discounts for Russian ESPO Blend crude oil have narrowed for March-loading cargoes on brisk demand from China as buyers moved quickly to secure barrels while Indian refiners remained cautious about Western sanctions, traders said.
Russian ESPO Blend cargoes loading in March traded at about $7-$8 per barrel below ICE Brent for delivery to Chinese ports, according to four trade and industry sources. Most March-loading ESPO has been sold, they added.
Some ESPO cargoes loading in February had traded at discounts as wide as $9-$10 per barrel, some of the sources said.
ESPO Blend traded at a premium of between $1 and $2 to ICE Brent for most of last year, and slipped to a discount versus ICE Brent for delivery to Chinese ports only in the autumn amid new Western sanctions. Small volumes of ESPO Blend were also purchased by Indian refiners last year.
China, the largest buyer of ESPO Blend oil, loaded from the Pacific port of Kozmino in eastern Russia, also absorbed a significant portion of Urals oil in January, market sources said, as Indian refiners scaled back Russian oil purchases.
For March, Urals were traded at a discount of $11 to $12 per barrel delivered to China, traders said.
China's independent refiners, which received new crude oil import quotas in late 2025, have also boosted Russian oil purchases.
The US imposed sanctions on Russian producers Rosneft and Lukoil in October and also hiked tariffs for India as punishment for its heavy buying of Russian oil.
Western sanctions have complicated payments and shipping for some Chinese buyers, but ESPO and Urals remain attractive options for smaller Chinese refiners seeking prompt cargoes, traders noted.
India's Reliance Industries will buy up to 150,000 barrels per day of Russian oil from February for its domestic market-focused refinery, a company executive said on Thursday, sharply lower than the 500,000 bpd term supply it received from Rosneft for most of 2025.
Despite Reliance's return, India's overall Russian oil imports are expected to remain subdued through February and March, the sources added.
The drop in India's demand has led to wider discounts for Russian Urals and more Russian oil being stored onboard ships.
Asian floating storage of oil with Russian origin hit a one-month high at 10.57 million barrels on Wednesday, up from less than seven million barrels in the previous week, according to data analytics firm Kpler.
(Reporting Siyi Liu and Chen Aizhu in Singapore and Reuters reporters in Moscow. Editing by Jane Merriman and Elaine Hardcastle)