Urals Crude Shifts to Premium as India, China Boost Demand

Russian Urals crude has shifted from discounts to premiums in India due to stronger demand and tighter export availability. This is the first time since May that Urals has been sold at a premium against dated Brent. The change reflects increased buying interest from both India and China, as well as lower supply from the Black Sea region.

Prices have surged, with October-delivery cargoes of Urals offered at premiums up to $1 per barrel above dated Brent. This marks a sharp turnaround from September-arrival cargoes, which were sold at discounts of $1 to $2 per barrel.

The shift in prices is attributed to robust demand for Russian oil from India and China. Indian refiners have stepped up their purchases amid concerns over Middle East supply security due to military tensions involving Iran and disruptions to tanker traffic through the Strait of Hormuz.

China's demand for ESPO Blend, Russia's flagship Far Eastern grade, has also increased as Chinese buyers seek alternatives to potentially disrupted Middle Eastern supplies. As a result, premiums for ESPO Blend have strengthened in recent weeks.