China snaps up discounted Russian oil: falling Indian demand undermines Kremlin revenues
Supplies of Russian crude oil to China rose from 1.39 to 2.09 million barrels per day; discounts on Urals of up to $12 per barrel. What this means for Russia’s budget revenues and for Ukraine’s security — we break it down point by point.
By Tetiana Suchkova-Ladik
February 20, 2026 · 2 min read
In brief
According to Bloomberg, supplies of Russian crude oil to Chinese ports rose from 1.39 million barrels per day in December to 2.09 million barrels per day in the first 18 days of February. Part of that increase offset a reduction in purchases by India, which in recent months has cut imports to roughly 1.2 million barrels per day.
What happened
Bloomberg, citing vessel-tracking data, reports that Chinese refiners are ramping up purchases of Russian oil, attracted by discounts. Traders say Urals' discount to Brent has reached about $12 per barrel, making Russian feedstock economically attractive for refineries in China.
"Discounts on Urals make shipments profitable for Chinese refiners — they are simply filling a feedstock shortfall at an attractive price."
— traders interviewed by Bloomberg
Why it matters for Ukraine
First, the fall in oil-and-gas receipts hits the Kremlin's budgets: in January, Russia's oil and gas revenues fell by half compared with January 2025. Second, less stable and less profitable revenue streams make long-term financing of military expenditures more difficult.
However, it's important to understand the mechanics: revenue declines do not happen instantly. Russia can redirect flows, use price maneuvers or subsidies to blunt the budgetary hit. Analysts also note that rising shipments to China partially neutralize the effect of reduced Indian demand, but do not fully restore lost proceeds.
"The rise in shipments to China compensates for volumes, but not for equivalent revenue: the Russians sell cheaper, so the effect on revenues remains negative."
— energy market analysts, comment to Bloomberg
What next?
If the trend continues — rising shipments to China at discounts alongside a drop in Indian demand — budgetary pressure on the Kremlin could intensify. For Ukraine this means two things: first, prolonged economic weakness in Russia reduces its ability to sustain its war machine; second, a window opens for external pressure and a sanctions strategy that would increase strategic pressure on Moscow.
Questions for partners and the market: can temporary declines in Russia's revenues be turned into a lasting strategic advantage for Ukraine — or will Moscow find ways to smooth the blow? The answer depends on policy coordination, control over supply logistics, and monitoring of price maneuvers in the global oil market.
