London Daily

Focus on the big picture.
Thursday, Sep 11, 2025

Russia Offers Record Discount For Its Oil As Buyers Pause, Struggle To Finance

Russia Offers Record Discount For Its Oil As Buyers Pause, Struggle To Finance

Three buyers of Russian crude oil have been unable to open letters of credit from Western banks to cover their purchases, four trading sources said on Thursday following the Russian attack on Ukraine.
A letter of credit is a letter issued by banks that guarantees a buyer’s payment to a seller will be received on time and for the correct amount. However, banks may find such a definitive guarantee hard to stand by after Russia arrived in Ukraine cities by land and sea early on Thursday morning in what Russian President Vladimir Putin referred to as a “special military operation.”

Missile fire was reported near the city of Kiyv, and Russia has landed in port cities such as Odesa. Crude oil prices have shot up as a result, with Brent crude spiking to more than $104 per barrel.

So who is trying to purchase Russian crude oil? Buyers of Russian oil include Big Oil companies such as BP, Chevron, Exxon, Shell, and TotalEnergies, to name just a few. Trading houses, including Trafigura and Vitol, also purchase Russian crude oil.

Vitol also trades with Russian mining companies, according to Vitol’s website.

The anonymous Reuters sources have not disclosed which banks refused to offer letters of credit for the Russian crude oil, but any halt in the flow of Russian crude oil, which exports 7.5 million barrels of crude oil and crude oil products per day, including to the United States.

In November of last year, 17.8 million barrels of Russian crude oil and petroleum products made their way to the United States.

And we note that the US imported an average of 106,000 barrels per day last week from Russia...

We await the sanctions news later today to see what happens with that data next, and more than 12 million barrels of Russian-origin crude oil and refined products are en route to the U.S. aboard almost two dozen vessels for delivery in the next month, according to oil-analytics firm Vortexa.

Additionally, as Bloomberg reports, some oil traders are pausing purchases of Russia’s crude while they wait to see how the West responds to the nation’s invasion of Ukraine.

Five crude traders and refinery officials said that there’s currently a hiatus in buying of Russian barrels.

"The restrictions will be very deep. We're expecting most European banks will pull out of financing any commodities from Russia. Letters of credit are being stopped, financing in general towards Russian commodities is being stopped," said Igho Sanomi, founder of energy trading company Taleveras.

The pause mirrors what’s happening in the oil-tanker market, where owners are also avoiding offering their ships to transport the nation’s crude.

"The key word today is obviously hold off and do not do anything that could backfire in the future," said Hugo De Stoop, chief executive of Euronav, one of the world's biggest tanker owners, in an interview.

"At the moment, we're not touching any cargo that's linked to Russia."

The situation has seen traders rushing to secure supplies from elsewhere in the world, according to Frontline Ltd., one of the world’s largest owners of supertankers.

In response to this pause in buying (or inability to find credit), Russia has slashed its price for Urals crude to a record $9.80 discount to Brent, according to Platts...

That is almost 10x wider than the average over the past few years.

"We're a big buyer of Urals, but we're not buying at the moment," said a person at a major European refiner.

"We stopped about a month ago."

So, everyone needs Russian oil... but everyone is also terrified to buy it right now due to fears over sanctions.
Newsletter

Related Articles

0:00
0:00
Close
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
×