The widening discount is expected to further reduce Russia's oil revenues, which are a major source of funding for the Kremlin and have already collapsed by 27% in October. The sanctions have caused Russia's key buyers, China and India, to search for alternative oil suppliers, resulting in the discount of Urals relative to the international Brent benchmark widening to an average of $23.52 a barrel. Russia's flagship Urals crude oil price at the Black Sea dropped to $36.61 per barrel, its lowest level in nearly three years, following the announcement of U.S. sanctions on Rosneft and Lukoil. That’s the lowest Urals has traded since March 2023, when Russian crude prices plunged with the EU embargo on Russian crude oil imports. The widening discount of Urals will now weigh further on Russia’s oil revenues, the biggest budget income for the Kremlin to finance the war in Ukraine.