Rise in oil prices driven by Iran pushes Russia's Urals crude to record levels

The rise in oil prices driven by Iran, which has impacted global markets, has pushed Russia's Urals crude to record levels.

The price per barrel of Urals crude at Russia's Primorsk port in the Baltic Sea rose to $116.05 on April 2, reaching its highest level in 13 years. This level, calculated excluding shipping costs, represents an increase of nearly double the $59 average barrel price in the Russian government's 2024 budget.

As the war in Ukraine continues, these unexpected oil revenues are easing economic pressures on the Kremlin. According to experts, Russia has been generating high income from energy exports in recent weeks.

In addition to Primorsk, the price per barrel of Urals crude at the Novorossiysk port was measured at $114.45. The price spread between Urals oil exported from Western ports and the global benchmark Dated Brent fell below $27.75, reaching its lowest point since mid-December. Specifically for Urals oil sold to India, the premium over Brent crude has risen from $3.9 to $6.1 in the last two weeks.

However, despite this high revenue potential, Russia's energy exports and refinery infrastructure are facing disruptions due to attacks by Ukrainian forces. Recent attacks on ports along the Baltic coast, in particular, are disrupting maritime transport and creating a risk of contraction in the country's export revenues.

While barrel prices significantly exceeding budget targets are providing serious relief to Russian public finances, geopolitical tensions in the region and risks stemming from attacks are causing export revenues to follow an unstable trajectory.