The increase in discount is a consequence of heightened sanction risks at the end of October when the United States imposed restrictions on two of the largest Russian oil companies. In general, this is standard for the oil market: the Urals discount to Brent typically increases in the first weeks and months following the tightening of sanctions. This pattern was evident, for instance, in the second quarter of 2022 when, in light of the EU's decision to impose an embargo on maritime oil supplies from Russia, the discount temporarily exceeded $30 per barrel. ESPO oil, which shares similar physical and chemical characteristics with Brent and other low-sulfur grades, was generally sold at a premium to Urals on the spot market even before 2022. History indicates that investors tend to adjust to a new level of sanction risks over time, which suggests that the discount will begin to decrease no later than early 2026. Source: Vedomosti