Russia discounts ESPO crude for China following new US sanctions

The United States (US) new sanctions against Russia’s energy giants Rosneft and Lukoil have directly impacted the prices of the country’s Far East ESPO crude oil.

Bloomberg reported that following these sanctions and the European Union’s 19th sanctions package, discounts on Russian oil have exceeded $1.5 per barrel.

Premium oil now sold at a discount

Traders who spoke to Bloomberg stated that in spot sales this week, ESPO crude was trading at $0.5 below the price of Brent crude, including delivery costs.

Last week, before the sanctions were announced, the same oil was sold at a premium of over $1 per barrel compared to Brent.

Rosneft is the target of the sanctions

Low-sulfur Siberian oil, transported via the East Siberia-Pacific Ocean (ESPO) pipeline, traditionally commands a higher price than high-sulfur Ural oil.

The majority of ESPO oil is exported by Rosneft, a company targeted by US sanctions. Lukoil’s shipment volume on this pipeline is smaller than Rosneft’s.

Gazprom Neft and Surgutneftegaz, which also ship oil through the same pipeline, are already on the sanctions list.

This particular oil is in high demand from both China’s state-owned refineries and private refineries accustomed to processing sanctioned crude from Iran and Russia.

Chinese state companies halt purchases, private companies continue

According to Bloomberg‘s report, some Chinese state-owned refineries, including Sinopec, have canceled their purchases of Russian oil following the latest sanctions. Most of these cancellations involve ESPO-grade shipments.

However, the analytics firm Vortexa assesses that China’s private refineries are purchasing approximately 800,000 barrels per day of Russian ESPO, Sokol, and Sakhalin Blend crude, and this demand is expected to remain high.

It is not yet clear whether these refineries will take over the shipments canceled by the state-owned companies.

Exports reached a record level in September

Meanwhile, according to calculations by the Russia-based Price Indexes Center, the export of seaborne ESPO crude oil increased by 22.6% in September compared to August.

According to the RBC, daily exports reached 146,000 tons, or over 1 million barrels, marking the highest shipment level of 2025.