Russian oil prices spike as Iran and US factors come into play - Bloomberg
Russian oil prices are soaring (Photo: Getty Images)
Prices for Russian oil in March and April showed record growth. The main reason for the price increase is the conflict in the Middle East, reports Bloomberg.
Russian Urals oil, sold in western Russian ports, averaged $106.30 per barrel in April. This is 42% higher than in March, when prices also rose due to the escalation of the conflict between the US and Iran.
The crisis in the Middle East has pushed the price of Urals well above the $59 per barrel projected in Russia's 2026 budget. The average price of Urals oil in March rose to 6,191 rubles, according to Bloomberg calculations based on government data.
If the average oil price in April remains at the current level and the exchange rate stays the same, the price of Urals oil this month will rise to approximately 8,300 rubles, the highest since March 2022.
Despite the rise in oil prices, Russia may face difficulties in increasing production in the near future, given the damage to port and energy infrastructure.
The IEA estimated the country's daily crude oil production in March at 9 million barrels, 230,000 barrels less than a year earlier.
Strikes on Russian oil infrastructure
On the night of April 5, drones struck Novorossiysk – videos of a fire at the Sheskharis terminal appeared online. Additionally, there were reports of explosions at a Transneft facility where large tankers are serviced.
The attacks continued in the following days – according to the Ukrainian General Staff, on the night of April 7, an oil terminal in the port of Ust-Luga on the Baltic Sea was hit.
Also, due to the strikes, Russia temporarily suspended oil shipments through the ports of Primorsk and Ust-Luga – infrastructure was damaged, and fires broke out at the facilities.
