US and Israels War on Iran Could Boost Russian Oil Exports

Russian Urals Oil Prices Surge Amid US-Israeli War on Iran

The price of Russian Urals oil has increased significantly in recent weeks. The US decision to temporarily ease sanctions on Russia’s oil-related exports has led to an increase in demand for Russian crude. According to figures from the Centre for Research on Energy and Clean Air, Russia earned an additional 672 million euros ($777m) in oil sales in the first two weeks of the war on Iran.

The war on Iran has resulted in the closure of the Strait of Hormuz, a critical sea route that carries 20 percent of the world’s oil and gas from producers in the Gulf. This has led to a shortage of oil supplies, prompting countries to charter tankers carrying Russian oil bound for China to change course and head to India instead.

The average price of Urals oil is now around $90 per barrel, significantly higher than the pre-war price of less than $60. The US decision to ease sanctions on shipped Russian oil has provided Moscow with a critical window to maximize export volumes and oil revenues. Experts say that Russia’s Urals grade meets the demand for alternative medium-sour crudes.

The price of Brent crude, the international benchmark, has risen to above $100 a barrel since the closure of the strait. Many analysts believe that a price of $200 is no longer “far-fetched”. The surge in Russian oil prices is attributed to the massive supply vacuum created by the closure of the Strait of Hormuz.

According to data from Vortexa, at least seven tankers carrying Russian oil had changed course mid-voyage from China to India earlier this week. Indian media reported that these changes were confirmed by Rakesh Kumar Sinha, special secretary in the Ministry of Ports, Shipping and Waterways. The increased demand for Russian oil has led to a significant increase in Russia’s oil revenues, with estimates suggesting a rise of nearly 80 percent since the beginning of the year.

The price of Urals oil is now consistently trading above the G7 price cap of $60 as buyers prioritize energy security over regulatory compliance in a high-volatility environment.

Source: Al Jazeera