Urals Oil Falls to 4-Month Low

Russian Urals crude fell below $60 per barrel, marking a four month low as global benchmarks declined following an agreement between the US and Iran to halt mutual attacks. This temporary truce allows safer maritime navigation, accelerating oil shipments through the critical Strait of Hormuz. Although this de-escalation hints at a lasting peace deal to fully reopen a channel that previously handled 20% of global crude and liquefied natural gas, wary shipowners face ongoing bottlenecks, leaving hundreds of vessels still stranded in the Persian Gulf. Meanwhile, structural domestic issues emerged as Russian President Vladimir Putin acknowledged internal fuel shortages and widespread gas station lines. To counter this tight domestic supply, officials are considering a complete prohibition on diesel exports.

Russian Urals crude fell to below $65 per barrel, the lowest in over three months, tracking international benchmark prices as markets priced in expectations that a US-Iran deal could reopen the Strait of Hormuz and unleash additional supply. Brent and WTI crude prices dropped as traders anticipated the return of Iranian exports and easing pressure on global inventories. The possible interim agreement, expected to allow Tehran to resume oil sales, has already prompted tanker repositioning ahead of a gradual reopening of the strategic waterway. Analysts expect flows to recover slowly due to security concerns and operational limits. At the same time, Russia is shipping near-record crude volumes as Ukrainian strikes on refineries push more barrels into export markets. Russian shipments averaged 3.83 million barrels a day in the four weeks to June 14, the highest pace this year.

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.