Russia's Oil Revenue Surges as Hormuz Disruption Lifts Urals Price

Russia's oil revenues are surging as the Iran war continues to choke the Strait of Hormuz, driving up the price of its flagship Urals crude. For tax purposes, Russia will calculate May oil revenues using an average Urals price of $94.87 per barrel, the highest level since October 2023, according to Bloomberg calculations based on government data. That translates into nearly 7,300 rubles per barrel in tax revenue, a windfall for Moscow as global crude markets remain scrambled.

The disruption at Hormuz, a critical chokepoint for about 20% of global oil supply, has lifted all crude benchmarks, but Urals has benefited disproportionately. The grade typically trades at a discount to Brent due to sanctions and logistics, but the supply squeeze has narrowed that spread. For oil traders, this highlights the geopolitical risk premium embedded in crude prices and the asymmetric impact on different grades. NowPrice's real-time fuel quotes show Brent crude trading near $95, with Urals at a narrower discount than usual.

Looking ahead, the duration of the Hormuz closure remains the key variable. Any extension of the disruption could push Urals even higher, while a ceasefire would likely reverse the windfall. Traders should monitor diplomatic developments and OPEC+ response, as the group may adjust quotas to compensate for lost Iranian supply. The May tax calculation locks in high revenues for Russia, but June's figure will depend on whether the crisis persists.