hyotographics/Shutterstock Save for later Print Download Share LinkedIn Twitter The oil market is awash with discounted, sanctioned crudes, which at around 4.7 million barrels per day now constitute about 5% of the global oil trade. These flows from Russia, Iran and Venezuela have reached their highest level since Russia's invasion of Ukraine in February 2022. Most of this oil lands in China and India — the two biggest engines of global demand growth — which means the broader market ramifications can be profound. These crudes are offered at discounts ranging from as low as 30¢ per barrel to over $10/bbl relative to benchmark Brent, depending on crude quality, demand from refiners and US sanctions enforcement policies. Beijing embraces all sanctioned grades, but New Delhi, despite getting offers for cheap Iranian and Venezuelan barrels, has stuck to Russian oil — after securing US approval. The Biden administration doesn't want to see oil prices spike, especially in an election year, which influences its policing of sanctions. However, political pressure to keep the heat on Russia, Iran and Venezuela means that US enforcement can be uneven, which can influence volumes and discounts for sanctioned crudes.
