Urals Oil Supported by Hormuz Closure

Russian Urals crude traded around $100 per barrel, moving closer to international benchmark prices as the closure of the Strait of Hormuz tightened global oil supply. Additional support came from a temporary US sanctions waiver allowing international buyers to receive Russian cargoes in an effort to stabilize energy markets. Although Ukrainian drone strikes continued targeting Russian refineries and Baltic ports, Moscow partly offset the disruption through stronger pipeline exports, including resumed Druzhba flows to Hungary and Slovakia. Russia’s oil export revenues continued to climb despite lower production levels, helped by elevated global oil prices and supply disruptions linked to the Iran conflict. According to the IEA, Russia earned $19.18 billion from oil exports in April, up $6.28 billion from a year earlier, even as oil output fell by 460,000 barrels per day to 8.8 million bpd and exports declined to 7.03 million bpd.

Russian Urals crude jumped to around $110 per barrel, the highest since 2013, as global oil prices climbed amid the ongoing Middle East conflict. Disruptions to Gulf supplies through the Strait of Hormuz have pushed crude above $100, with Russia benefiting as buyers seek alternative sources. President Donald Trump said he expects to reach a deal to end hostilities but also threatened strikes on Iran’s energy infrastructure, including Kharg Island, warning that if the strait is not reopened, the US could target oil and power facilities. President Vladimir Putin urged Russian producers to capitalize on soaring prices but cautioned that the surge is temporary. Meanwhile, the US expanded a permit allowing countries to purchase Russian crude, extending a temporary waiver previously granted only to India. Indian refiners, including Indian Oil Corp. and Reliance Industries, have bought around 30 million barrels of Russian crude after receiving approval in early March, according to sources.

Urals crude has been trading between $61 and $65 per barrel since August, compared with $65–69 for Brent. China remains the largest buyer of Russian crude, while Russia continues to be India’s top supplier. In response to India’s purchases, US President Trump launched a pressure campaign, warning that cutting imports would help push Moscow to end the conflict. After New Delhi refused, Washington imposed a 50% tariff on Indian imports, effective August 27. Despite the move, India has maintained its buying. Meanwhile, Ukrainian drone attacks in September disrupted Russian exports and raised risks of production cuts, forcing Moscow to redirect shipments to other western ports. New restrictions on sanctioned tankers have further complicated Russian flows. In July, the EU and UK imposed additional measures, introducing a floating price cap set at 15% below the average market price—currently around $47.60 per barrel—well below the G7’s $60 cap established in December 2022.