Russian oil price nearly doubles after blockade in Persian Gulf

Demand for Russian oil

Buyers are turning back to Russia, the world’s second-largest oil exporter, due to threats to shipping in the Persian Gulf. The cost of Urals cargo shipped from the Baltic port of Primorsk rose from $35 million to $54 million in just a week.

For the first time in history, Urals oil supplied to Indian ports is being sold at a premium to Brent, despite G7 efforts to cap Russian crude prices.

Rising logistics costs

Despite high prices, Russian exporters are facing sharply higher logistics costs:

• Freight costs from Baltic ports to India nearly doubled to $22–23 million;

• A tanker shortage caused shipping prices to jump $5–8 million in just one week;

• Freight cost from Novorossiysk, which resumed operations after drone attacks, rose above $20 million.

Market tensions eased somewhat after US President Donald Trump predicted a quick end to the Middle East conflict, sending Brent prices down from a peak of $119.

Oil prices

The energy crisis triggered by the war in Iran has pushed global oil prices back above $100 per barrel, reaching levels not seen since 2022. The blockade of key tanker routes through the Strait of Hormuz hit gasoline prices, immediately affecting retail prices.

Amid forecasts that Russia could benefit from the situation, Washington took radical measures: to stabilize the market and overcome the energy shortfall, the US began the process of lifting oil sanctions on Russia, hoping for a swift resolution of the crisis.