LONDON (Realist English). The global oil market remains in the grip of acute geopolitical turbulence.
By the close of trading on 27 April, prices of key benchmark grades had settled at multi‑month highs against the backdrop of an effective blockade of the Strait of Hormuz and the failure of US‑Iran talks. Russia’s Urals grade has for the first time in a long time surpassed some premium grades in price, delivering windfall revenues to the country’s budget.
Current prices of major crude grades
| Grade | Price (per barrel) | Dynamics / comment |
| Brent (benchmark) | $106.68 – 107.49 | Holds above $105 for second week |
| WTI (US) | $96.17 | Lags Brent due to export logistics |
| Urals (Russia, FOB Primorsk) | $95.4 (average 13–19 April) | Up nearly 1.5 times from the start of the year |
| Urals (FOB Novorossiysk) | $94.4 | |
| ESPO (Russia, Asia) | $89.6 – 91.1 | Chinese demand pushes price to nearly double the budget target |
| OPEC basket | ~$106 | Following Brent |
Russia’s 2026 budget is based on an Urals price of $59 per barrel. Current quotes exceed that target by almost 80%. According to Ministry of Finance estimates, each additional dollar in the annual price adds about 150 billion rubles to the budget.
Strait of Hormuz closed: losses and deficit
The escalation of the US‑Israeli conflict with Iran has led to a de‑facto blockade of the Strait of Hormuz, through which about 20% of global seaborne oil trade used to pass. Iran has closed the strait, while the US has imposed a naval blockade on Iranian ports.
According to the International Energy Agency (IEA), losses of Middle Eastern supply amount to 14.5 million barrels per day. Global oil inventories have fallen by 11–12 million barrels per day in April alone — a record decline in the history of observations.
Russian Deputy Prime Minister Alexander Novak said that even after the strait is reopened, “the market will need months to recover.”
Unexpected effect on Russian oil
China’s state‑owned Sinopec, facing a shortage of Middle Eastern feedstock, was forced to buy Russian ESPO crude at a premium of $8–10 per barrel to Brent — instead of the usual discount. As a result, the Urals grade has for the first time in a long time exceeded the price of the higher‑quality ESPO, which analysts attribute to a temporary demand distortion.
Nevertheless, the IEA warns that further production increases in Russia are unlikely in the coming months due to port infrastructure problems.
Expert forecasts for 2026–2027
Analysts at leading investment banks and international organisations agree that the geopolitical premium will remain high at least until mid‑2026.
Goldman Sachs:
- Q2 2026 — $100
- Q3 2026 — $93
- Q4 2026 — $90
Bank experts note that the market’s turnaround from last year’s surplus (1.8 million b/d) to a deficit (9.6 million b/d) is one of the sharpest in decades.
US Energy Information Administration (EIA):
- Peak Brent price in Q2 — $115
- Average price for 2026 — $96
Morgan Stanley:
- Q2 — $110
- Q3 — $100
- Decline to $80 by 2027
Bloomberg (citing Iranian sources): under a full blockade of the strait, prices could spike to $120–125 this or next year.
International Monetary Fund (IMF) — most severe scenario:
- 2026 — $110
- 2027 — $125
- Consequences: global growth would collapse to 2%, inflation would accelerate to 6%
Main risks
The oil market has entered a phase of heightened volatility, where speculative prices have decoupled from fundamental supply and demand indicators. Experts are unanimous: the key factor is the duration of the Strait of Hormuz blockade.
Even under an optimistic scenario with a swift reopening, prices are unlikely to return to pre‑crisis levels of $55–65 per barrel in the coming years due to accumulated deficits and large‑scale damage to energy infrastructure in the Gulf.
Further price spikes remain possible at any moment — driven by new negotiation initiatives, military provocations, or unexpected statements by leaders.
