Urals Oil Rise to 4-Month High

Russian Urals crude fell to around $110 a barrel, down from above $120 on September 16, as weaker shipments, new US sanctions and the gradual restoration of Saudi Arabian oil flows increase competition in key markets. Russia’s overseas crude exports averaged 3.53 million barrels a day in the four weeks through September 20, while weekly shipments fell more sharply following a halt in cargoes from the Black Sea port of Novorossiysk. Saudi Arabia’s efforts to restart its East-West pipeline have also pressured Russian grades by increasing alternative supplies. Meanwhile, President Donald Trump signed legislation allowing tariffs of up to 100% on imports from Russia’s five largest energy customers, raising concerns among Indian refiners. India could reduce Russian crude imports to 20%-30% of total purchases, potentially cutting demand by more than 1 million barrels a day. At the same time, attacks on Russian refineries have disrupted nearly 1 million barrels a day of processing capacity.

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.