Prices for Russia's flagship Urals crude oil for delivery to Indian ports in late August/early September firmed further, while discounts to Brent were the narrowest since 2022 amid firm demand in India and Turkey and low supply of the grade, three sources said.
Spot discounts for Urals crude narrowed to between $1.50 and $1.60 per barrel to dated Brent on a delivery ex-ship (DES) basis on average for cargoes arriving in India in late August/early September, from between $1.70 and $2 per barrel to dated Brent on a DES basis about a month ago, the traders said.
That is the narrowest discount for Urals oil cargoes to dated Brent in Indian ports since the Ukraine war broke out in 2022.
Russia's daily oil exports from the ports of Primorsk, Ust-Luga and Novorossiisk are set to fall to around 1.77 million barrels per day (bpd) in August, down from 1.93 million bpd in July's plan.
Narrowing discounts, lower supply of spot Russian barrels and fresh Western sanctions may push Indian refiners to look for alternative oil supplies, traders said.
On July 18, the EU approved its 18th package of sanctions against Russia, which includes sanctions on Moscow's energy sector and against Russia-backed Indian refiner Nayara Energy.
A few days later Britain imposed new sanctions on Russia's so-called "shadow fleet," targeting 135 oil tankers along with two Russian firms, shipping company Intershipping Services and oil trader Litasco Middle East.
India has been the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union, which imposed a ban late in 2022.
Large volumes of Russian Urals oil are shipped to India under a deal between the country's largest private refiner, Reliance Industries, and Russian oil giant Rosneft last year, limiting the crude offered in the spot market, traders said.
(Reporting by Nidhi Verma in New Delhi and Reuters reporters in Moscow; Editing by Sharon Singleton)