Price differentials for Russia's Urals crude delivered to India in August have fallen to their lowest levels since late February amid ample supply and rising competition, three trade sources told Reuters on Wednesday.
They said discounts for August Urals cargoes delivered to Indian ports on a DES basis had widened to below $7 per barrel versus the dated Brent benchmark, from about $4 per barrel just 10 days ago.
Russia's flagship grade is trading at its weakest level in India since the outbreak of the Iran war, as Middle Eastern producers resume shipments through the Strait of Hormuz following last month's interim peace deal.
During the winter, when tighter US sanctions disrupted Russian oil trade, Urals discounts to Brent widened to as much as $10 per barrel, compared with $1 to $3 per barrel last summer.
Crude supplies from the Persian Gulf are expected to increase as the Strait of Hormuz reopens. Russia is also raising exports.
Russia is set to ship record volumes of crude from its main western ports in June as refinery outages caused by Ukrainian drone attacks divert more barrels to export markets.
India's imports of Russian oil surged to a record high in June, according to ship tracking data from LSEG and Kpler, as refiners snapped up Russian barrels to offset the impact of the Strait of Hormuz disruption.
(Reporting by Reuters. Editing by Mark Potter)