In response to shifting market dynamics, Russia has begun slashing prices on its Urals crude oil, primarily to preserve its export relationships with China. As reported by Bloomberg, traders reveal that Urals oil, which previously found a significant buyer in India, is now being sold at a discount of $12 compared to the benchmark Brent price at Chinese ports, reflecting a slight increase from a $10 discount reported in January. These figures account for transportation costs and highlight an ongoing strategic pivot in Russia's energy export strategies.

At the same time, Iranian crude oil has also increased in discount, with reports indicating a rise from $8-9 to $11 per barrel. This shift indicates a fierce competition in the Chinese market, where refineries are increasingly selecting more affordable options amidst changing geopolitical and economic landscapes. The cost of Russian oil sent to Chinese ports last week averaged between $41.20 and $43.20 per barrel, representing a staggering discount of approximately $27-29 against the Brent benchmark.

The data reveals that Russian oil deliveries to China have notably surged, averaging daily supplies of 2.9 million barrels, marking a 20% increase from January 2025 and a whopping 50% from December 2025. This rapid pivot in sales and exports underscores the challenges Russia faces in sustaining its budget amid global market pressures and the criticality of maintaining its foothold in the Chinese oil market as economic sanctions weigh heavily on its other export avenues.