Russia just found itself on the right side of the oil shock.
As the Iran war continues to choke flows through the Strait of Hormuz and scramble global crude markets, Moscow’s flagship Urals blend is essentially printing money. 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, up 18% from April.
And nearly 60% higher than a year ago.
But just days ago, Moscow cut its 2026 economic growth forecast to 0.4% from 1.3%, acknowledging that the wartime growth machine is running out of easy fuel. Russia’s economy contracted by 0.3% in the first quarter, its first quarterly decline since early 2023, as high interest rates, sanctions, and slowing domestic momentum began piling up.
Persian Gulf supply disruptions, however, have pushed buyers back toward barrels they once avoided or discounted heavily—like Russia’s. India has returned as a major buyer, and Moscow is once again swimming in petrodollars.
The extra cash has already given the Kremlin breathing room.
Bloomberg previously reported that higher oil revenues allowed Russia to resume replenishing its rainy-day fund and postpone some politically awkward budget tightening.
Still, there is one complication: the ruble.
Russia’s currency has strengthened to its highest level against the dollar since early 2023. That sounds great at first read. But oil is priced in dollars and taxes are collected in rubles. A stronger currency shrinks the local value of every exported barrel.
Then there are subsidies. Russia paid out 359 billion rubles, or roughly $4.8 billion, in April alone to support refiners and shield domestic fuel markets from global price spikes.
Even so, oil around $95 is doing what sanctions and monetary policy could not: temporarily making Russia’s budget problems look smaller. The Kremlin has spent years building a war economy. Right now, oil is helping keep the machine fed.
By Julianne Geiger for Oilprice.com
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