In a development that until a few years ago seemed unthinkable, the price of Russian Urals crude surpassed that of North Sea Brent crude, overturning balances in the global oil market. According to a report by Izvestia, Russian crude, which traditionally traded at a significant discount due to its higher sulfur content and greater density, is now recording a premium price against the Western benchmark. Urals is trading at approximately $110–111.3 per barrel in physical transactions from Russian ports. Reuters reports approximately $110, while another report cites LSEG data. Brent falls today to $103 per barrel, registering a 2.5% drop.
The Middle East changes the rules of the game
A decisive role in this reversal is played by renewed Middle East tension, which has significantly raised risks for maritime oil transport from the region. At the same time, Brent prices face downward pressure from concerns over a slowdown in Western economies, as well as from oil sales originating from US strategic reserves. Conversely, refineries in China and India face limited supply choices, a factor that boosts demand for Russian crude.
China and India pay more for "safe" oil
According to Finam analyst Nikolay Dudchenko, the primary buyers of Russian oil appear willing to pay even higher prices to ensure stable deliveries and lower geopolitical risks during transport. Increased demand from Asia comes at a period when available alternative supply sources are constantly shrinking.
The nightmare of Bab el-Mandeb
Analysts warn that a potential disruption of navigation in the Bab el-Mandeb Strait could trigger a severe shock in the global energy market. Under such a scenario, Europe would lose access to significant quantities of Middle East diesel and Asian supplies, forcing a turn toward costlier US oil imports and West African shipments. Concurrently, Asian markets would be cut off from Atlantic basin supplies, effectively creating two nearly independent regional energy zones.
"There are no longer many alternatives"
Analysts at S&P Global estimate that buyers are gradually exhausting available oil market alternatives to Russian crude. Meanwhile, data from Vortexa indicate that Chinese refineries seek to reduce transit costs by choosing shorter and safer supply shipping routes. As Euler analyst Andrey Polishchuk notes, any further disruption in Middle Eastern supplies is likely to translate into even greater demand for Russian crude oil, further reinforcing Moscow's standing in the global energy sector.
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