Rosneft CEO Igor Sechin told a Beijing energy forum on 25 November that China has saved $20 billion on Russian oil purchases since 2022. He framed Moscow’s fire-sale pricing as Chinese ‘procurement efficiency’—essentially acknowledging his country’s losses.
The admission comes as Russia’s oil revenues crater. October receipts fell 27% year-over-year; November is projected to drop 35%. The discount on Urals relative to Brent widened to $23.52 per barrel in mid-November—the largest gap since May 2023, according to OilPrice.com. Putin is subsidizing a rival economy while hiking VAT to 22% to cover his record budget deficit.
Discounts disappeared—sanctions brought them back
The reason behind the discounts is the sanctions. Russian oil was sold at 16% below alternatives in summer 2022, according to calculations by the Gaidar Institute, cited by The Moscow Times. By late 2023, the gap had narrowed to 5%. In 2024, it nearly vanished.
Then came the October sanctions.
On 22 October 2025, the US Treasury designated Rosneft and Lukoil—Russia’s two largest oil producers—along with dozens of subsidiaries. The effect was immediate: Urals crude at Russian ports fell to $20 below Brent, a two-year record. The discount on ESPO crude, which China buys through Pacific ports, doubled from $4.20 to $9.50 per barrel.
In the first quarter of 2025, Russian discounts to China averaged 2.8%. By the second quarter, they had jumped to 6.3%—and post-sanctions pricing suggests the third quarter will be worse.
Combined losses
India, Russia’s second-largest oil buyer after China, has saved $12.6 billion on Russian crude since 2022, according to The Indian Express. Combined with China’s $20 billion windfall, Moscow’s forced discounts have cost Russian oil companies approximately $33 billion—2.6 trillion rubles at current exchange rates.
Desperate for buyers, Russia throws India its biggest oil discounts yet (INFOGRAPHIC)
This sum equals 1.5 times Russia’s entire annual higher education budget of 1.7 trillion rubles ($21.6 billion). It exceeds four to five years of spending for wealthy Russian regions, such as Sverdlovsk Oblast ($6.7 billion annually) or Krasnodar Krai ($7.6 billion).
Trending Now
Former Ukrainian Infrastructure Minister Volodymyr Omelyan noted the strategic absurdity: “Formally, this is called ‘procurement efficiency,’ but in reality, it’s a massive loss of revenue for Moscow—forced payment for political dependence on Beijing.”
Russia’s shrinking leverage
Sechin boasted that Russia supplied nearly 19% of China’s energy imports in 2024, worth approximately $100 billion, making Moscow China’s largest oil supplier with a 20% market share.
But market share acquired through discounts is market share without leverage. Beijing gets cheap oil; Moscow gets cash—but less of it. And with Russia’s budget deficit quadrupling in 2025 and economists warning the Kremlin may have 18 months of war funding remaining at current intensity, every discounted barrel accelerates the timeline.
