Russia and Iran are currently engaged in an unplanned competition in the oil market, specifically targeting sales to China. Recent reports indicate that Urals crude oil, which was primarily purchased by India previously, is now being sold at a discount of $12 per barrel compared to Brent crude prices in Chinese ports. This discount has increased from $10 in January, indicating a shift in market dynamics as both countries look to capitalize on the demand for discounted oil amidst changing global trade patterns.

Traders report that Iran has also increased its discount, raising it to $11 per barrel from $8-9 in December. This shift has led to a significant uptick in the average daily deliveries of Russian oil to China, which have risen to 2.09 million barrels in the first eighteen days of February. This figure marks a 20% increase from January and a striking 50% rise compared to December, highlighting the escalating competition between these two oil-producing nations in the Chinese market.

Despite these increases, reports from Kpler indicate that the overall volume of Iranian oil supplied has remained stagnant at 1.2 million barrels since the beginning of the year, which is 12% lower than the same period in 2025. The primary buyers of both Russian and Iranian oil in this scenario are independent Chinese refineries, suggesting that these entities are benefiting from the reduced prices while showcasing the broader implications of the geopolitical shifts affecting oil trade in the region.