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- Oil of the time: the price of Urals has increased by 150 since the beginning of the Middle East conflict%
Oil of the time: the price of Urals has increased by 150 since the beginning of the Middle East conflict%
Since the beginning of the conflict in the Persian Gulf, the price of Russian Urals grade oil exported through the country's western ports has increased by 150%. The East Siberian variety ESPO, supplied through the Far East mainly to China, has risen in price by about 70%. Experts attribute this dynamic to high demand for Russian raw materials amid supply disruptions through the Strait of Hormuz, as well as the easing of US sanctions. According to analysts, the demand for domestic fuel may continue after the end of the conflict, as the restoration of the region's oil infrastructure may take several years. At the same time, prices are likely to remain above pre-crisis levels, which will support Russian budget revenues.
How Russian oil prices have changed
The military actions in the Persian Gulf led to the largest global energy crisis in recent history. At the same time, if the price increase for Brent crude oil was more than 50%, then Russian raw materials rose in price by 70-150%. A source in one of the pricing agencies told Izvestia about this.
The export value of Urals (the ports of Primorsk and Novorossiysk) has increased from $37 to $92 per barrel since the beginning of the Middle East conflict by mid-May, he said. At the same time, the premium grade of domestic ESPO oil, which is shipped mainly to the Asia—Pacific countries through the port of Kozmino in Primorsky Krai, rose in price by 66% - from $57 to $95 per barrel. In early April, Urals surpassed ESPO altogether — $109 against $96 per barrel.
According to Tamara Safonova, General Director of the Independent Analytical Agency for the Oil and Gas Sector, the export price for Urals in the Baltic and Black Sea ports of the Russian Federation has almost tripled, from $37 as of February 27 to a maximum peak of $110 per barrel on April 2, 2026. And ESPO increased by 79%: from $57 per barrel at the end of February to a maximum of $102 at the end of March.
According to the Ministry of Economic Development, the average cost of Urals, which is used to calculate taxes in the oil industry, increased from $44.59 per barrel in February to $94.87 for the same volume in April.
The average price of Russian oil is calculated as the sum of the arithmetic mean of export prices in the ports of Primorsk and Novorossiysk with a coefficient of 0.78 and the average price in the port of Kozmino with a coefficient of 0.22, said Ekaterina Kosareva, Managing partner of VMT Consult. She also noted that before the conflict in the Middle East, the ESPO grade was traditionally traded at a premium to Urals — on average, the difference was about $10 per barrel.
What is the reason for the increase in cost?
The high price increase for Urals compared to ESPO is explained by the fact that Urals is close in its characteristics to Arab grades of oil that disappeared from the market due to the blockade of Hormuz — in particular, Arab Light and Basrah Medium. And oil refineries in India and a number of other countries are technologically focused on such raw materials, so the shortage of such grades creates a risk of capacity shutdown, explained Valery Andrianov, associate professor at the Financial University under the Government.
As Bloomberg reported, citing ship tracking data, information from regional officials and estimates from analytical companies Rapidan Energy Group, FGE NexantECA, Kpler and Rystad Energy, OPEC oil production fell to a 36-year low last month. According to the survey, in April this figure decreased by 420 thousand barrels per day to 20.55 million per day, which was the lowest level since 1990. Back in March, after the first closure of the Strait of Hormuz by Iran, production decreased by 8.6 million barrels per day, the largest drop in decades.
"The price imbalance is related to the high demand for Urals grade oil supplies to the world market against the background of closed volumes in the Strait of Hormuz," Tamara Safonova noted.
As for ESPO, it is a light, low—sulfur oil, similar in quality to Brent, explained Valery Andrianov. That is, the supply of this type of raw material has hardly changed due to events in the Middle East, and prices for it are rising only because of the general crisis, and not because of demand for this particular variety, he added.
How Russian oil supplies have changed
Demand for Urals is also growing due to the easing of US sanctions. On May 18, OFAC (Office of Foreign Assets Control, a division of the Ministry of Finance) issued a 30-day license for the third time to provide the most vulnerable countries with our oil already at sea. Against this background, countries such as Sri Lanka, the Philippines, Bangladesh, South Korea, and Indonesia have expressed interest in purchasing Russian raw materials.
According to Valery Andrianov, the plants of Indonesia (Pertamina), Sri Lanka (CPC) and Bangladesh (Eastern Refinery) have historically focused on processing sulfur oil from Saudi Arabia and Iraq, so Urals is more suitable for them. And refineries in South Korea (SK Energy and GS Caltex) and the Philippines (Petron) are focused on producing environmentally friendly fuels with low sulfur content, so it's better for them to use ESPO.
Theoretically, such Urals consumers can quickly switch to low-sulfur Sokol or ESPO oil, but with prices being equal, this is economically unjustified, according to Dmitry Scriabin, portfolio manager at Alfa Capital Management Company.
Currently, there is no official data on the dynamics of Russian oil exports. Izvestia has sent inquiries to the Ministry of Energy and major oil companies.
As Bloomberg reported, Russia increased its oil exports in April. By May 3, the average volume of shipments from the country's ports had grown to 3.66 million barrels per day. This is 7.3% more than in the previous four-week period, which ended on April 5, when supplies amounted to 3.41 million barrels per day.
In April, according to Kpler, the volume of purchases of Russian raw materials amounted to 1.6 million barrels per day in both India and China. At the same time, according to Sergey Tereshkin, CEO of Open Oil Market, the number of ESPO importers is very limited: first of all, we are talking about China. Whereas Urals supplies were carried out to India, Turkey, Africa and a number of countries in the Middle East, including for re-export to the markets of other countries.
According to Ekaterina Kosareva, our country is not yet fully exploiting its export potential, while the demand for sulfur oil in the world is growing. She recalled that factories in the United States are also mostly "focused" on high-sulfur oil, which was bought in the Middle East before the Gulf War.
Demand for Urals will continue even after the end of the conflict in the Persian Gulf, as the restoration of the destroyed oil infrastructure will take several years, according to various estimates, and the cost of domestic raw materials will also be higher than pre-crisis levels, which will have a positive impact on budget contributions, Ekaterina Kosareva believes. She recalled that the oil and gas revenues of the budget of the Russian Federation in April amounted to 855.6 billion rubles against 617 billion in March, and 432.3 billion rubles in February.
In the last two months, the budget has received payments from oil companies for personal income tax, however, high prices for Russian oil will continue to have a positive impact on contributions to the treasury, the expert added.
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