Urals Oil Falls to 4-Month Low

Russian Urals crude rose above $100 a barrel, its highest level since May, while Brent traded above $105 as escalating fighting involving Yemen-based Houthi militants and Saudi-backed forces heightened concerns over further Middle East supply disruptions. Meanwhile, the International Energy Agency again lowered its outlook for Russian oil production, citing continued Ukrainian drone strikes on energy infrastructure and refineries. Russian crude output fell by 200,000 barrels a day in August to 8.36 million bpd, down sharply from its January peak of 9.3 million bpd. The agency cut its 2026 production forecast by 125,000 bpd to 8.7 million bpd and expects 2027 output to average 8.6 million bpd. Russia’s refining sector is also under growing pressure, with sanctions restricting access to replacement equipment and repeated drone attacks damaging key processing units. The IEA warned that repairs, colder weather and continued strikes could further weaken the country’s refining capacity.

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.