The Urals crude oil discount compared to the Brent benchmark price is projected to decrease by 26% by the end of 2026, reaching $17 per barrel, according to analysts from Euler in their latest report. For the second quarter of this year, the average discount is expected to be approximately $23 per barrel, while in the first quarter, Euler reported an average discount of $32 per barrel.

The average discount level for 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 projected to return to the $14 per barrel level.

Furthermore, the discount for Russian ESPO crude oil (ESPO; from the East Siberia – Pacific Ocean pipeline) is anticipated to decline by 9% by the end of this year, settling at $10 per barrel, as per Euler's analysts. They estimate that this figure will be $18 per barrel in the first quarter, dropping to $11 per barrel in the second quarter.

The average discount for oil prices in 2026 is expected to be $13 per barrel, and $7 per barrel in 2027, having been $8 per barrel in 2025, according to the company's findings.

Discounts for Russian ESPO crude oil prices are expected to gradually decrease as external restrictions on export flows diminish, as highlighted in the report. By 2028, the discount for Urals crude is projected to shrink to $13 per barrel, while for ESPO it is expected to be $5 per barrel.

Discounts in Russian crude oil prices saw a sharp increase following heightened sanction restrictions at the end of 2025. On October 22, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) expanded sanctions against the Russian oil industry, citing Russia's lack of serious interest in a peace process aimed at resolving the conflict in Ukraine. Consequently, by November, the average discount for Russian Urals crude had soared to its highest level in over two years, as reported by Vedomosti on December 1, 2025. This upward trend continued in the subsequent months.

Currently, discounts are decreasing as companies adapt to sanctions, reducing freight costs and other export expenses, according to one of the report's authors, Andrey Polishchuk, a senior analyst in the oil, gas, and transportation sectors at Euler.

Prior to the tightening of US sanctions in October 2025, the discount for Urals crude oil ranged from $12 to $14 per barrel, according to Euler. Analysts believe that this level will not be reached again until the third quarter of 2027. The prolonged adaptation of exports is attributed to the cumulative effect of significant external restrictions, says Polishchuk.
According to Euler's analysts, the average price for Urals crude oil 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 has fixed the price of Urals crude oil at $59 per barrel for 2026, $61 per barrel for 2027, and $65 per barrel for 2028. According to the Ministry of Economic Development, in May 2026, the average price of Urals crude oil was $86.52 per barrel.

The future dynamics of discounts in Russian crude oil prices will largely depend on geopolitical conditions, says Sergey Tereshkin, CEO of Open Oil Market. If the geopolitical situation improves, the Urals crude oil discount could decrease to $10 per barrel or lower, notes the expert. At the same time, he believes that substantial increases in discounts are unlikely to occur, as the potential for further tightening restrictions against the Russian oil sector has already been largely exhausted.

Managing partner of NEFT Research, Sergey Frolov, believes that discounts for Russian crude oil will continue to compress due to limited raw material supply in the world market, improvements in logistics, and the reorientation of export flows by domestic companies.

Russian companies are adapting quite quickly to the restrictions, reminds Dmitry Kasatkin, partner at Kasatkin Consulting. In his opinion, the reduction in discounts in the second quarter was aided by the blockade of the Strait of Hormuz, which prompted buyers to pay less attention to the origin of the raw materials, prioritizing physical availability and supply prices.

Should new sanctions against the Russian oil sector be implemented, they will only temporarily widen the discounts, the expert believes. However, if the armed conflict in the Middle East drags on further, oil consumers may begin to restructure imports, changing delivery routes and supplier structures, cautions Kasatkin. This could increase competition in the market and not only slow down the reduction of discounts but potentially lead to their renewed growth, warns the analyst. Additionally, he notes that a decline in global oil demand and increased supply from other producers could hinder the reduction of discounts.

Frolov also allows for a brief surge in discounts due to increased production and exports from competing suppliers. However, he contends that if demand for raw materials in China and India rises, the reduction of discounts will accelerate.

Analyst Nikolai Dudchenko from Finam forecasts that the average price of Urals crude oil in 2026 will range from $65 to $75 per barrel. Kasatkin believes the average price will be higher, estimating it to be between $73 and $78 per barrel.

Source: Vedomosti