Iran war drives Russian oil windfall as Urals crude hits highest level since 2023

Russia is getting a further boost from the Iran war as the price for its flagship Urals oil export blend reached the highest since October 2023 for tax purposes this month.

The finance ministry will calculate taxes for oil producers in May based on an average Urals price of $94.87 a barrel and an exchange rate of 76.938 rubles per US dollar, according to the nation's tax service. That amounts to nearly 7,300 rubles per barrel, a 18% increase from the previous month and a 60% jump from a year ago.

The Kremlin, which relies on the oil and gas industry for about a fifth of its budget revenues, saw its war economy supported by higher oil prices and stronger demand for Russian barrels after the Iran war disrupted supplies from the Persian Gulf through the Strait of Hormuz.


The inflow of petrodollars has already allowed the government to resume replenishing its rainy-day fund and delay cutting non-priority spendings.

The boost from the war-driven oil rally would be even greater if not for the appreciation of the nation's currency. A stronger ruble means lower tax proceeds from barrels priced in dollars.