Oil market price battle: Russia and Iran offer deeper discounts to China as crude piles up at sea
Times of India
by TOI BUSINESS DESKFebruary 25, 2026
AI-Generated Deep Dive Summary
Russia and Iran are locked in a price battle to win over Chinese buyers, offering deeper discounts on oil amid a surge in displaced crude following India's reduced purchases. With Indian imports from Russia expected to fall by 40% this month, much of the surplus oil is now heading to China, sparking a competitive pricing war between Russian and Iranian suppliers.
Chinese independent refiners, known as "teapots," have historically absorbed excess barrels but are reaching capacity limits due to government import quotas and limited storage space. This has left sanctioned Russian and Iranian crude piling up in both onshore and offshore storage facilities across Asia. Data shows Russian oil exports to China rose by nearly 20% in February, while Iranian exports dropped by about 12% year-on-year, with over 48 million barrels of Iranian crude now floating in Asian waters—up from around 33 million in early February.
The situation is further complicated by geopolitical tensions. Russia has reduced its oil output despite the financial strain on its war in Ukraine, while Iran is racing to sell as much oil as possible before a potential US strike could disrupt exports. Analysts note that Russian crude carries a lower risk for Chinese buyers compared to Iranian oil, which faces stricter sanctions and potential disruptions due to US actions or blockades in the Strait of Hormuz.
This price war highlights China's pivotal role as a buyer for sanctioned oil and its limited ability to absorb the growing supply. As Russian and Iranian producers scramble for market share, the competition not only affects global energy markets but also underscores the delicate balance between geopolitical tensions and economic pressures. The outcome could shape future oil prices, trade dynamics, and the
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Originally published on Times of India on 2/25/2026