Prices for Russia’s Urals crude remained below the $60 per barrel price cap set by G7 countries and the EU throughout July, but discounts to North Sea Dated (NSD) crude narrowed by $0.6-$0.8/barrel to approximately $11.9/barrel, the International Energy Association (IEA) said, as per Interfax.

This discounts contracted to “one of their narrowest levels since the inception of sanctions and reflective of overall sour crude market tightness,” IEA analysts said.

Strong demand for sour crude supported Urals prices, but discounts widened sharply in early August following new sanctions announcements, they said.

The prospect of fiercer competition for non-Russian sour crudes is reflected in high Dubai crude prices as refiners will seek to avoid secondary U.S. and EU sanctions in the coming months and quarters.

The IEA also said that new EU sanctions banning imports of refined products made from Russian crude, effective from January 2026, have increased diesel demand and time spreads. Analysts estimate that Europe imports around 500,000 bpd of refined products from India and Turkey, which are major importers of Russian crude.

The IEA believes that these EU sanctions could further constrain the diesel balance, while U.S. distillate stocks are at their lowest seasonal level since 1996.
As reported, after U.S. President Donald Trump announced additional tariffs on India for purchasing Russian oil, Urals discounts increased by approximately $1/barrel compared to previous day levels, while premiums in China remained unchanged. According to Argus data, Urals FOB Primorsk discounts to NSD (North Sea Dated) rose from $11.5/barrel (mid-July levels) to $12.55/barrel, while FOB Novorossiysk discounts increased from $11.15/barrel to $12.25/barrel.The discount for Russian Urals at Indian ports (DAP West Coast India) reached $3/barrel in August 7 trading, compared to $1.95/barrel maintained since mid-July.mrchub.com
Source: Reuters