Discounts on Russia's flagship Urals have widened to more than $10 per barrel against dated Brent for deliveries to India ports, Reuters reported on Tuesday, citing sources.
It will mark a sharp shift from the premiums seen just a few months ago as refineries scale back purchases amid improving supply from other producers.
According to the news agency, weaker refining margins in Asia and a rise in alternative crude supplies from the Middle East and Iran reduced demand for Russian oil, pushing sellers to offer steeper discounts to attract buyers.
The latest pricing marks a reversal from the March-June period, when Urals crude traded at a premium due to supply disruptions caused by tensions in the Middle East.
With oil exports from the region recovering and more cargoes becoming available, Indian refiners now have a wider range of sourcing options, reducing their dependence on Russian barrels.
Russia has also increased crude exports as domestic refinery runs declined following repeated Ukrainian drone attacks on refining infrastructure, adding more barrels to the export market, Reuters reported.
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On the other hand, China, which is another major buyer of Russian oil, has stepped up purchases from Middle Eastern producers, further weakening demand for Urals crude.
India has emerged as one of Russia's biggest energy customers since Western sanctions were imposed following Moscow's invasion of Ukraine in 2022.
Russian crude has consistently accounted for a significant share of India's imports, largely because it has been available at attractive discounts compared with other international grades.
However, the widening discount suggests that the pricing advantage is increasingly being shaped by market fundamentals rather than supply constraints.
For Indian refiners, cheaper Russian cargoes could improve profitability, while for Russian exporters, deeper discounts may be necessary to retain market share in Asia as competition from Middle Eastern suppliers intensifies.
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