Russian Urals crude drops to $50 as Hormuz reopening hammers prices

Russia's Budget Under Pressure as Urals Crude Drops to $50

The price of Russia's flagship Urals crude oil has plunged to approximately $50 per barrel, falling well below the assumptions underpinning the country's federal budget as the US-Iran peace framework reshapes global energy markets.

Oil Price Collapse Strains Moscow's Finances

Yegor Susin, managing director at Gazprombank Private, wrote that based on Dated Brent quotes — the benchmark to which 80% of the world's physical oil shipments are pegged — Urals crude has fallen to around $50 per barrel, with the discount on Russian crude hovering near $21–22. Dated Brent fell to roughly $72 on Thursday, continuing a steep slide that began after the US-Iran memorandum of understanding was announced on June 14.ua +3

The drop puts Urals squarely below the $59 per barrel price written into Russia's 2026 federal budget. Susin estimated that the average Urals price for June — the figure used to calculate oil and gas taxes — will come in at about $63 per barrel, a sharp decline from May levels.charter97 +3

Since its April peak, when Middle East supply disruptions pushed Urals above $116 per barrel, the benchmark has lost more than half its value. Trading Economics data showed Urals at $58.83 on June 24, down nearly 37% over the past month.tradingeconomics +1

Strait of Hormuz Reopening Drives the Selloff

The catalyst for the collapse has been the US-Iran framework deal, which envisions the reopening of the Strait of Hormuz. On June 24, tankers began transiting the waterway, sending Brent crude futures down roughly 4% to their lowest level since before US and Israeli strikes against Iran in late February, according to CNBC reporting. S&P Global analysts cautioned that while the deal is bearish for future prices and risk premiums, full normalization of supply through the strait could extend into 2027.spglobal +1

The formal agreement was signed in Switzerland on June 19, though its implementation remains uncertain. President Trump warned on June 17 that the memorandum was "not final" and that military action could resume if Iran failed to comply.reuters

Fiscal Outlook Darkens

Russia was already struggling to balance its books before the oil price drop. A Reuters analysis from March found that even with elevated prices at the time, Moscow's budget remained strained, requiring either sustained high oil prices or further ruble depreciation to close the gap. Russia's Accounts Chamber has estimated budget revenues will fall 2.1 trillion rubles ($28 billion) short of the original budget law for 2026.nv +1

The Economic Development Ministry has slashed its GDP growth forecast to 0.4%, down from 1.3% projected as recently as September 2025, with growth registering just 0.2% year-on-year through the first four months of the year.meduza