Russia set for oil tax windfall as Strait of Hormuz disruption drives prices above $100

Russia is reportedly heading for another gigantic oil tax payday in April as the Middle Eastern war Trump and Israel started drives crude prices higher globally and pulls more demand toward Russian barrels.

In the first 13 days of April, it averaged $106.30 a barrel, a 42% jump from March, based on Argus Media data used by Moscow to calculate oil taxes.

Now, of course, the main trigger is the closure of the Strait of Hormuz, which has slowed Middle East energy flows, shaken markets, and forced refiners to look elsewhere. Russia has been one of the financial winners from that scramble.

The supply shock has shifted trade flows and raised the value of available barrels. That has sent Urals (the export blend sold from Russia’s western ports) far above the level built into the budget. For Moscow, that means a stronger tax base as spending climbs.

Russia’s 2026 budget was built on $59 a barrel for Urals, and President Vladimir Putin had already raised spending last month; this surge gives it more room. If the average price seen so far in April holds, and if the exchange rate stays near current levels, Urals could hit about 8,300 rubles. That would be the highest monthly level since March 2022, after Russia launched its full-scale invasion of Ukraine.

Talks cool futures prices while the IEA warns demand and supply are taking hits

Oil prices fell on Tuesday after Vice President JD Vance said the U.S. and Iran could meet for another round of peace talks after negotiations failed last weekend.

In a Fox News interview, JD said, “Whether we have further conversations, whether we ultimately get to a deal, I really think the ball is in the Iranian court, because we put a lot on the table.” After that, U.S. crude futures for May delivery were down 6% at $93.07 a barrel as of press time, while Brent for June delivery was down nearly 4% at $95.58.

The International Energy Agency said Tuesday that the oil shock tied to the Iran war will hit demand this year as consumers react to higher fuel costs.

It now expects demand to contract by 1.5 million barrels per day in the second quarter, the biggest drop since the Covid-19 pandemic. For the full year, the agency expects demand to fall by 80,000 barrels per day. That is a sharp swing from its earlier forecast for 640,000 barrels per day of growth.

The agency also said global observed oil inventories fell by 85 million barrels in March. Stocks outside the Middle East Gulf dropped by 205 million barrels, or 6.6 million barrels per day, as flows through the Strait of Hormuz were choked off.

Floating storage of crude and oil products in the Middle East rose by 100 million barrels. Onshore crude stocks in the region rose by 20 million barrels. China added 40 million barrels of crude to storage.

The IEA said oil posted its biggest monthly gain ever in March, spot crude and differentials rose faster than futures, and North Sea Dated traded near $130 a barrel, about $60 above pre-conflict levels. It also said Russia may struggle to raise production above early first-quarter levels because of damage to port and energy infrastructure.

The agency added, “We recognize that this scenario could prove too optimistic,” and warned that a longer conflict could bring disruption in the months ahead.

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