Russia’s flagship Urals crude collapsed to roughly $34 a barrel, sending a clear price signal through the oil market that US sanctions are starting to hurt.
On Friday, barrels loading from the Baltic Sea traded at $34.82, while cargoes from the Black Sea slipped even further to $33.17, based on figures from Argus Media.
Over the same period, Dated Brent sat near $61, showing how sharply Russian grades have underperformed global benchmarks this year.
The price gap widened after President Donald Trump rolled out broad sanctions in October against the country’s two largest oil producers. Shipments kept moving, but the trade became harder to execute.
Sanctions force deeper discounts and strain oil revenues
At the point of export, Ural barrels are selling at an average markdown of about $27 per barrel, Argus data showed. By the time the crude reaches Indian refiners, that gap tightens to around $7.50.
How much of that difference ends up back with producers remains unclear, leaving questions over who absorbs the loss.
Officials in Moscow have said the discounts should narrow in the coming months. Traders remain cautious. Oil and gas generate around one-quarter of the federal budget, so a drawn‑out slump directly cuts into the cash pool used to fund military operations in Ukraine. The longer prices stay this low, the heavier the pressure on public finances.
There is also a familiar market twist. As prices fall, incentives grow for refiners to look past restrictions. Cheaper barrels can tempt buyers willing to take legal or logistical risks.
In past cycles, that dynamic helped Russian crude prices stabilize after an early drop. This time, tighter enforcement and added shipping scrutiny have slowed that rebound.
Attacks on energy assets widen as global oil tensions rise
While prices slide, physical risks are climbing. An oil tanker caught fire after an overnight drone strike near the southern city of Rostov, part of Ukraine’s campaign against energy targets. Emergency crews were still battling the blaze hours later.
Alexander Skryabin, the city’s mayor, said on Telegram that the fire spread across 20 square meters. Regional governor Yury Sluysar reported two crew members were killed and three others injured.
In recent weeks, Ukrainian strikes have focused on assets in the Black Sea and Caspian Sea, including a key terminal handling crude flows.
The energy conflict cuts both ways. As winter deepens, Russian forces have stepped up attacks on Ukrainian power infrastructure. Major cities, including Kyiv, now face blackouts lasting more than 10 hours a day, according to local officials.
Tensions are also spilling beyond Eastern Europe. China criticized Washington for seizing oil tankers near Venezuela, signaling support for Caracas as the standoff with the US escalates.
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