7 July 2026
Russian oil exports have reached record levels, as the loss of up to a third of domestic refining capacity forces companies to export more crude. But revenue from these exports is falling along with the price of Russian oil. The discount on oil, which had narrowed during the war in the Middle East, is widening again, and the price itself has returned to pre-war levels.
For the past four months, the average price of Urals has exceeded the budgeted $59 per barrel. Even in June, when supplies from the Persian Gulf began to increase as a result of the US-Iran agreement, it was $60.92, Bloomberg reports . In July, according to Argus Media, its price fell back to $40—$40.42 per barrel on July 2 and $41.53 on July 3. This is almost three times lower than at the peak of the energy crisis in early April, and the same price as Urals in February, before Israeli and US forces began bombing Iran.
According to Argus, the discount to Brent crude reached $27.35 per barrel on Friday, also returning to February levels (in the final days before the war, it exceeded $30). Due to falling oil prices, the Russian budget is under threat, writes Finam analyst Nikolai Dudchenko: “The price is below the budgeted level, which means the question of the budget deficit is once again arising.”
Despite the rise in Urals prices due to the war in the Middle East, oil and gas revenues (OGR) for the budget in the first half of the year were significantly lower than for the same periods in 2025 and 2024, Dudchenko points out: 3.66 trillion rubles versus 4.7 trillion rubles and 5.7 trillion rubles, respectively:
Simply extrapolating the obtained results to the second half of the year, the NGV shortfall compared to the planned amount could be approximately 1.5-1.6 trillion rubles. This situation could be partially offset by a possible weakening of the exchange rate in the second half of the year, as well as by an increase in export volumes.
But increasing supplies isn’t helping the budget much given falling prices and a strong ruble. Average seaborne exports over the past four weeks, ending July 5, rose to 4.22 million barrels per day, according to Bloomberg calculations based on vessel traffic data. This is a record high since the start of the war with Ukraine, before which approximately 600,000 barrels per day were being shipped through pipelines to European countries.
As Ukrainian drones and missiles relentlessly target Russian refineries and storage facilities, oil refining in Russia has fallen significantly. Reuters estimated the decline at 25% in June, while Sergei Vakulenko, a senior fellow at the Carnegie Berlin Center for Russia and Eurasia and a former Gazprom Neft executive, estimated it at 28% about a week ago.
Since then, not a single refinery among the top 10 largest has escaped the attack. The most powerful refinery, Gazprom Neft’s Omsk Oil Refinery, was the last to be hit.
“This situation could be partially offset by a possible weakening of the exchange rate in the second half of the year, as well as by an increase in export volumes.”
This calculation is written on rice paper with crayons. The “partial offsetting” of the plummeting budget can be easily destroyed by targeting export terminals, which happened several times before, and/or by targeting tankers, which has also happened several times before.
To put it in a nutshell, the mafia state is dying.
Wait, $40? That’s not what the Chicken-littles were telling us a few weeks ago, lol…
Slava Ukraini~~!!
I wonder why it’s not amounting to falling prices for U.S. consumers
🤔
$40 a barrel is still way to high. It needs to drop below $10 a barrel.