The discount on Urals crude oil compared to Brent crude is expected to decrease by 26% by the end of 2026, reaching $17 per barrel, according to analysts at Euler. In the second quarter of this year, the average discount is projected to be $23 per barrel. In the first quarter, the discount averaged $32 per barrel, based on Euler's data.
The average discount in 2026 is anticipated to be $22 per barrel, compared to $14 per barrel in 2025, as per Euler's report. By 2027, the average discount is expected to revert to $14 per barrel.
The discount on Russian ESPO crude (the East Siberia-Pacific Ocean pipeline) compared to Brent is forecasted 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 discount was $18 per barrel, while it is expected to drop to $11 per barrel in the second quarter.
The average discount on crude oil prices is expected to be $13 per barrel in 2026 and $7 per barrel in 2027; the figure for 2025 was $8 per barrel, as indicated by the company's data.
Discounts on ESPO crude prices are expected to gradually decrease as the impact of external restrictions on export flows diminishes, noted the report. By 2028, the discount on Urals crude is projected to decline to $13 per barrel, and $5 per barrel for ESPO crude.
Discounts on Russian crude oil have sharply increased due to the tightening of sanctions at the end of 2025. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) expanded sanctions against the Russian oil industry on October 22, citing "Russia's lack of genuine interest in a peaceful process" to resolve the conflict in Ukraine. As a result, by November, the average discount on Urals crude had surged to its highest level in more than two years (Vedomosti reported on this on December 1, 2025). This upward trend continued in the following months.
Currently, discounts are decreasing as companies adapt to sanctions by reducing freight costs and other export expenses, noted one of the authors of the report, Andrey Polishchuk, a senior analyst for the oil, gas, and transportation sectors at Euler.
Prior to the tightening of U.S. sanctions in October 2025, the discount on Urals crude averaged $12–14 per barrel, according to Euler. Analysts believe that this level will not be reached again until the third quarter of 2027. Such a prolonged adjustment in exports is attributed to the cumulative effect of a significant amount of external restrictions, Polishchuk explained.
According to Euler analysts, the average price of Urals crude is expected to be $59 per barrel in 2026, $45 per barrel in 2027, and $53 per barrel in 2028. The federal budget for 2026-2028 assumes Urals crude prices of $59 per barrel for this year, $61 per barrel for 2027, and $65 per barrel for 2028. The Ministry of Economic Development reported that in May 2026, the average price for Urals crude was $86.52 per barrel.
The future dynamics of discounts on Russian crude prices will depend entirely on geopolitical conditions, says Sergey Tereshkin, CEO of Open Oil Market. If the geopolitical situation improves, the discount on Urals crude could fall to $10 per barrel or lower, according to the expert. However, he believes that significant increases in discounts are unlikely, as the opportunities for tightening restrictions against the Russian oil sector have practically been exhausted.
Sergey Frolov, managing partner at NEFT Research, believes that discounts on Russian crude will continue to shrink due to limited crude supply in the global market, improved logistics, and the reorientation of export flows by domestic companies.
Russian companies are adapting to restrictions fairly quickly, reminds Dmitry Kasatkin, partner at Kasatkin Consulting. In his view, the blockade of the Strait of Hormuz contributed to the reduction in discounts in the second quarter, as buyers became less focused on the origin of the crude and prioritized physical availability and price of shipments.
New sanctions against the Russian oil industry, if introduced, will only temporarily widen discounts, according to the expert. However, if the armed conflict in the Middle East drags on further, oil consumers will begin to restructure imports by changing delivery routes and suppliers, Kasatkin notes. This could increase competition in the market and not only slow the reduction of discounts but potentially lead to their growth again, warns the analyst. Additionally, declining global demand for oil and increased supply from other producers could also hinder the decrease in discounts, he believes.
Frolov also anticipates a temporary increase in discounts due to the escalation of production and exports from competing suppliers. At the same time, if demand for crude rises in China and India, the reduction in discounts is expected to accelerate, the expert opines.
According to Nikolai Dudchenko, an analyst at Finam Group, the average price of Urals crude in 2026 is expected to be $65–75 per barrel. Kasatkin believes that the average price will be higher, ranging from $73 to $78 per barrel.
Source:
Vedomosti
