The U.S. war with Iran has led to a rise in oil prices, which was expected to provide a financial windfall for Russia. However, continuous Ukrainian drone attacks on Russia’s major export hubs have put a damper on these expectations.
When last checked, Brent crude oil was trading 2.89% higher at $108.46 per barrel.
Nearly 40% of Russia’s crude oil export capacity was halted on Wednesday, marking the country’s largest modern-era oil supply disruption, according to Reuters.
The attacks have compelled Moscow to review some exports and safeguard consumers, who are already grappling with high inflation. A major oil refinery in Yaroslavl, northeast of Moscow, was hit in a strike on Saturday, prompting the Kremlin to consider reinstating a gasoline export ban due to domestic fuel shortages.
Ukraine also carried out drone strikes on Russia’s major export hubs, targeting Novorossiysk, Primorsk, and Ust-Luga ports, previously. Fresh Sunday attacks parked fires at the Ust-Luga port, as per Reuters.
Russian Oil Revenue Soars Amid Risks
Before the drone attacks, Russia was earning around $760 million a day from oil due to the Iran war, as per an article on The Telegraph. Russia’s monthly oil and gas revenue could double from ~$12 billion to ~$24 billion due to higher prices and temporary U.S. sanctions waivers, stated the publication, citing the Kyiv School of Economics Institute.
However, Russian President Vladimir Putin urged Russian oil and gas companies to stay cautious and use rising hydrocarbon revenues to pay down debt rather than increase spending.
Earlier this month, Ukrainian President Volodymyr Zelenskyy said that global oil sanctions and strikes on Russian energy infrastructure have pushed Moscow’s 2026 deficit past $100 billion. But he warned that recent gains from the Middle East war, about $10 billion in two weeks, could embolden Putin to continue the conflict.
Notably, Russia’s economy has been strained since it invaded Ukraine in 2022, with sanctions, war-driven economic mobilization, labor shortages, and high inflation prompting the central bank to maintain elevated interest rates.
In another development, President Donald Trump said he doesn’t have a problem with a Russian-sanctioned oil tanker delivering fuel to Cuba, citing the urgent humanitarian needs of Cuban citizens despite U.S. sanctions. Kremlin later confirmed delivering the oil to the Latin American nation.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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