The discount on Urals crude oil prices compared to the benchmark Brent price is expected to decline by 26% by the end of 2026, reaching $17 per barrel. This assessment is outlined in a report by analysts at Euler. In the second quarter of this year, the average discount is projected to be $23 per barrel, according to experts. In the first quarter, Euler reported that the average discount was $32 per barrel.
The average discount level in 2026 is expected to be $22 per barrel, compared to $14 per barrel in 2025, according to data from Euler. By 2027, the average discount is anticipated to revert to $14 per barrel.
The discount on the price of Russian ESPO (Eastern Siberia – Pacific Ocean) oil compared to Brent is projected to decrease by 9% to $10 per barrel by the end of this year, according to Euler analysts. They estimate that in the first quarter, the figure was $18 per barrel, and it will drop to $11 per barrel in the second quarter.
The average discount level for oil prices in 2026 is expected to be $13 per barrel, while in 2027 it will be $7 per barrel. In 2025, the figure stood at $8 per barrel, according to the company's data.
Discounts on Russian ESPO oil prices are expected to gradually diminish as the impact of external constraints on export flows decreases, as noted in the report. By 2028, the discount on Urals oil prices is projected to narrow to $13 per barrel, while for ESPO, it will be $5 per barrel.
Discounts on Russian oil prices have surged significantly due to the tightening of sanctions at the end of 2025. The Office of Foreign Assets Control (OFAC) of the US Treasury Department expanded sanctions against the Russian oil industry on October 22, citing a "lack of serious interest from Russia in a peaceful process" aimed at resolving the conflict in Ukraine. As a result, by November, the average discount for Urals crude oil prices rose to a maximum level not seen in over two years (as reported by Vedomosti on December 1, 2025). This increase continued in the following months.
Currently, discounts are falling as companies adapt to sanctions by reducing freight costs and other export expenses, notes one of the report's authors, Andrei Polishchuk, a senior analyst in the oil, gas, and transport sector at Euler.
Before the tightening of American sanctions in October 2025, the discount on Urals oil prices was reported to be $12-14 per barrel, according to Euler. Analysts believe that this level will only be reached again in the third quarter of 2027. Such a prolonged adjustment period for exports is attributed to the cumulative effect of a significant array of external restrictions, Polishchuk says.
According to forecasts from Euler analysts, the average price of Urals crude oil in 2026 will be $59 per barrel, in 2027 it will be $45 per barrel, and in 2028 it will be $53 per barrel. The federal budget for the years 2026-2028 has set the Urals oil price this year at $59 per barrel, at $61 per barrel for 2027, and at $65 per barrel for 2028. According to the Ministry of Economic Development, in May 2026, the average price of Urals oil was $86.52 per barrel.
The future dynamics of discounts on Russian oil prices will be entirely dependent on geopolitical conditions, states Sergey Tereshkin, CEO of Open Oil Market. In the event of an improvement in the geopolitical situation, the discount on Urals oil could shrink to $10 per barrel or lower, the expert notes. However, he believes that a significant increase in discounts is unlikely, as the scope for further tightening restrictions on the Russian oil industry has been largely exhausted.
According to Sergey Frolov, managing partner of NEFT Research, discounts on Russian oil prices will continue to narrow due to limited raw material supply on the global market, improvements in logistics, and the reorientation of export flows by domestic companies.
Russian companies are adapting to limitations quite swiftly, reminds Dmitry Kasatkin, a partner at Kasatkin Consulting. He believes that the blockade of the Hormuz Strait contributed to the reduction of discounts in the second quarter, as buyers began to pay less attention to the origin of the raw materials, prioritising physical availability and price of supplies.
New sanctions against the Russian oil industry, if imposed, will only temporarily widen discounts, according to the expert. However, if the armed conflict in the Middle East prolongs, oil consumers may begin restructuring their imports by altering delivery routes and supplier structures, warns Kasatkin. This could increase competition in the market and not only slow the decline of discounts but also potentially lead to an increase, he advises. Additionally, a decrease in global oil demand and an increase in supply from other producers could hinder the reduction of discounts, according to his perspective.
Frolov also anticipates a temporary rise in discounts due to increased production and exports from competing suppliers. At the same time, he notes that if demand for raw materials surges in China and India, the reduction in discounts could accelerate.
Analyst Nikolai Dudchenko from FG Finam forecasts that the average price of Urals oil in 2026 will be $65-75 per barrel, while Kasatkin believes that it will be higher, at $73-78 per barrel.
Source: Vedomosti
