The price discount of Urals crude oil compared to the benchmark Brent crude is expected to decrease by 26% by the end of 2026, settling at $17 per barrel. This assessment comes from analysts at Euler in their latest review. In the second quarter of this year, the average discount is projected to be $23 per barrel, according to their forecasts. In the first quarter, Euler reported that the average discount was $32 per barrel.
The average discount level in 2026 is expected to reach $22 per barrel, compared to $14 per barrel in 2025, as indicated by Euler's data. By 2027, the average discount is anticipated to revert to $14 per barrel.
The price discount for Russian ESPO crude oil (from the Eastern Siberia-Pacific Ocean pipeline) compared to Brent crude is expected to decline by 9% to $10 per barrel by the end of this year, as per Euler analysts' estimates. They projected an average of $18 per barrel in the first quarter, with a decline to $11 per barrel in the second quarter.
The average discount level for oil prices in 2026 is anticipated to be $13 per barrel, while in 2027, it may drop to $7 per barrel. The figure was $8 per barrel in 2025, according to company data.
Discounts on Russian ESPO crude oil prices are expected to gradually decrease as the impact of external restrictions on export flows diminishes, as noted in the review. By 2028, the discount for Urals crude oil is projected to shrink to $13 per barrel, while for ESPO, it may decline to $5 per barrel.
Price discounts for Russian oil surged sharply due to the tightening of sanctions at the end of 2025. The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) expanded sanctions against the Russian oil sector on October 22, citing "Russia’s lack of serious interest in the peace process" for resolving the conflict in Ukraine. Consequently, by November, the average discount on Russian Urals crude rose to a two-year high, as noted in Vedomosti on December 1, 2025. The upward trend continued in the following months.
Currently, discounts are decreasing as companies adapt to sanctions, reducing freight costs and other export expenses, notes one of the review's authors, Andrey Polishchuk, Lead Analyst for Oil, Gas, and Transportation at Euler.
Before the tightening of U.S. sanctions in October 2025, the price discount for Urals crude was reported to be between $12 and $14 per barrel, according to Euler. Analysts anticipate this level will not be regained until the third quarter of 2027. This prolonged adaptation in exports is attributed to the cumulative effect of numerous external restrictions, says Polishchuk.
Euler analysts predict that the average price of Urals crude in 2026 will be $59 per barrel, followed by $45 per barrel in 2027, and $53 per barrel in 2028. The federal budget for 2026–2028 has set the Urals oil price at $59 per barrel for 2026, $61 per barrel for 2027, and $65 per barrel for 2028. According to the Ministry of Economic Development, the average price for Urals crude in May 2026 was $86.52 per barrel.
The future dynamics of discounts on Russian oil prices will be heavily influenced by geopolitical conditions, says Sergey Tereshkin, CEO of Open Oil Market. If the geopolitical landscape improves, the Urals crude oil price discount could decrease to $10 per barrel or lower, the expert notes. However, he believes that a significant increase in discounts is now unlikely since the potential for tightening restrictions on the Russian oil sector has virtually been exhausted.
According to Sergey Frolov, Managing Partner of NEFT Research, discounts on Russian oil prices will continue to compress due to limited raw material supply in the global market, improved logistics, and the reorientation of export flows by domestic companies.
Russian companies are adapting to restrictions quite swiftly, points out Dmitry Kasatkin, Partner at Kasatkin Consulting. He believes that the blockade of the Strait of Hormuz contributed to the discount reduction in the second quarter, as buyers began to pay less attention to the origin of raw materials, prioritizing physical availability and delivery prices instead.
New sanctions against the Russian oil sector, if imposed, will only temporarily widen discounts, according to the expert. However, if the armed conflict in the Middle East prolongs further, oil consumers may start to restructure imports, altering delivery routes and supplier structures, warns Kasatkin. This could increase market competition and hinder the decline of discounts, or even lead to a resurgence, according to the analyst. Additionally, weakening global demand for oil and rising supply from other producers could also impede discount reductions.
Frolov also allows for a short-term increase in discounts due to increased production and exports from competing suppliers. Meanwhile, a rise in demand for raw materials in China and India could accelerate the decline in discounts, the expert concludes.
According to Nikolai Dudchenko, an analyst at Finam, the average price for Urals crude in 2026 is expected to be between $65 and $75 per barrel. Kasatkin believes that the average price will be higher—between $73 and $78 per barrel.
Source: Vedomosti
