Strong demand in China has sent the price of Russia’s ESPO crude blend surging to the highest in eight months as ESPO discounts to Brent are at their narrowest since the EU embargo on Russian oil imports came into effect in December, multiple trade sources have told Reuters.

The EPSO crude going to China in September is trading at discounts of just $2-$2.50 per barrel to ICE Brent on delivered-ex-ship (DES) basis, according to the sources. This compares with discounts of around $4 per barrel for August.  

“August prices were already very expensive, but we were shocked to see that offers for September cargoes started at $2 discount,” one trade source told Reuters.