Russian ESPO blend oil flips to premium vs ICE Brent in China and India amid high demand - Traders

Russian ESPO Blend crude oil has seen narrowing discounts to ICE Brent for March-loading cargoes destined for China, reflecting robust demand from Asian buyers amid cautious purchasing by Indian refiners. ESPO Blend traded at a $7–$8 per barrel discount to Brent for Chinese deliveries in March, up from wider discounts of $9–$10 in February but significantly narrower than the $1–$2 premium it commanded for much of 2025 before slipping to a discount in autumn amid Western sanctions. Chinese independent refiners, or "teapots," have absorbed most of the displaced Russian oil, with January imports hitting a record 1.7 million barrels per day (bpd) as India scaled back purchases according to Reuters.

India’s reduced demand—projected at 1.159 million bpd for February—has pushed Urals crude to discounts of $11–$12 per barrel for Chinese deliveries, with floating storage of Russian-origin oil rising to a one-month high of 10.57 million barrels as reported. Reliance Industries’ recent purchase of 150,000 bpd of Russian oil for February, down sharply from 500,000 bpd in 2025, underscores India’s cautious stance according to maritime data.

U.S. sanctions on Russian producers and heightened tariffs on India have complicated transactions, yet Russian oil remains attractive for smaller Chinese refiners seeking prompt, discounted supplies according to market analysis. Analysts note that China’s appetite may have peaked without state refiners re-entering the market, as onshore inventories rise and March flows could decline as Reuters reported. Meanwhile, ESPO Blend’s narrower discounts and Urals’ steep discounts highlight China’s growing role as Russia’s primary crude buyer, with geopolitical tensions and policy shifts shaping regional dynamics according to The Times of India.