Russian ESPO crude exceeds $120 per barrel amid supply concerns

Russian ESPO Blend crude oil prices have surpassed $120 per barrel, marking their highest level since April. This surge is driven by increased demand from Chinese refineries seeking to secure feedstock ahead of the winter heating season, especially as supply disruptions in the Middle East—stemming from military operations involving the US, Israel, and Iran—threaten traditional supplies from Saudi Arabia.

Data indicates that the premium for ESPO Blend over the ICE Brent benchmark has reached record levels of $20 to $30 per barrel. Additionally, Urals crude prices have climbed toward $110 per barrel. In China, state-owned energy companies have moved to secure large volumes for November and December, limiting availability for independent refineries.

In the United States, lawmakers have approved legislation granting President Donald Trump the authority to impose tariffs on Russian oil markets. This measure aims to restrict Russia's ability to fund its war in Ukraine, though traders suggest it could inadvertently trigger further price spikes or bolster Russian oil revenues.