The price of Russian oil has fallen to pre-war levels in the Middle East – Bloomberg

The price of Russia’s flagship Urals crude has fallen to levels last seen before the escalation of the Middle East conflict, putting serious pressure on the Kremlin’s state budget. 

In the first three days of July, the average price of Urals at Western ports in Russia was $41.66 per barrel, which is more than half of the peak levels seen in April. It is precisely these figures that the Russian Ministry of Finance uses to calculate tax revenues, which, due to a time lag, will be reflected in the budget as early as August.

Previous months brought Moscow additional revenue due to the crisis surrounding the Strait of Hormuz, and since March, the price per barrel had exceeded the $59 budgeted for this year, reaching $60.92 in June. However, the resumption of shipping following a temporary agreement between the U.S. and Iran caused commodity prices to plummet once again. In the first five months of this year, Russia’s budget deficit has already reached 6 trillion rubles, which is 60% more than the target for the entire year; therefore, keeping prices below the budget threshold for an extended period will significantly complicate the financing of the war against Ukraine, according to Bloomberg.