Russian seaborne oil exports fall to their lowest level in a year as discounts become less attractive for Asian customers

• Russia's seaborne oil exports fell to their lowest levels since September 2021, according to S&P Global.
• The discount for Russian Urals crude compared to Brent futures also has been cut in half.

Russia's seaborne oil exports in the first half of this month fell to their lowest levels since September 2021, as discounts on Russian crude become less attractive to its customers.

In the first two weeks of September, exports totaled 3.03 million barrels per day, a drop of around 314,000 barrels per day from August levels, according to Kpler data cited by S&P Global, which also noted that's below levels seen before Russia invaded Ukraine.

The decline came as one of Russia's biggest customers sharply cut purchases. Russian crude flows to India were down 40% from August levels in the two-week period to 452,000 barrels per day.

Meanwhile, the discount on Russian Urals crude compared to Dated Brent in Europe has sunk from $40 a barrel in July to just $20 a barrel. And spot prices for Russian ESPO crude only offer a 50-cent discount when compared to front-month ICE Brent crude, S&P analysts said.

In fact, India has been turning to cheaper oil from Saudi Arabia, which dethroned Russia as India's second-top oil supplier last month.

The decline in India's demand for Russian oil comes as the European Union's partial oil embargo on Moscow kicks in at the end of the year. The Kremlin has said countries like India and China could offset export declines to Europe.

But Russia could soon have a much bigger hole to fill. Its oil shipments to the EU have fallen below a million barrels a day, according to S&P, and the embargo could leave Russia with an extra 2.2 million barrels a day to hand off.