In less than 2 weeks, Russia's Urals crude oil price has made an unprecedented leap.
On February 27, one day before the US and Israel launched airstrikes on Iran, Urals oil only traded around 40 USD/barrel. By March 10, Urals oil traded at 100.67 USD/barrel - even higher than the global benchmark Brent oil price by about 99 USD.
This is a rare time that Russian oil - which has been subject to Western sanctions since 2022 - has surpassed the international reference price. This development has disrupted the entire Russian oil price control mechanism established after the Ukraine conflict in just 12 days.
The global oil price increase came from a major shock in the Middle East. After Iran responded to attacks by disrupting traffic in the Strait of Hormuz, about 21 million barrels of oil per day - equivalent to nearly 1/5 of the global oil supply - were stuck. Rapid supply declines caused Brent prices to surpass the 100 USD/barrel mark for the first time since 2022.
Even when the International Energy Agency (IEA) announced the release of 400 million barrels of oil from strategic reserves - a record large discharge, the market has not cooled down. Many financial institutions, including Goldman Sachs, have raised their Brent oil price forecast for the end of the year, assuming the Hormuz crisis lasts longer than expected.
In that context, Russian oil became a rare remaining alternative supplier in the market. Before the war broke out, Russia faced great financial pressure as oil and gas revenue fell sharply. In February 2026, this revenue of Moscow decreased by 44% compared to the same period last year, while the budget was built on the assumption that the Urals oil was around 59 USD/barrel.
But the Middle East crisis reversed the situation. As Iranian oil almost disappeared from the market and supply from Venezuela remained limited, major energy traders were forced to return to Russian oil.
India - one of Russia's largest customers - quickly increased purchases again. Just a few days after the US issued a 30-day exemption allowing Indian refineries to receive Russian oil blocks floating at sea, New Delhi bought about 30 million barrels more.
This change also reflects the difficult reality of sanctions. As global oil prices rise sharply, maintaining a low price ceiling for Russian oil becomes more difficult to implement.
Previously, the European Union (EU) had lowered the ceiling price of Russian oil to about 44 USD/barrel in February. But when the Brent price approached 100 USD/barrel, this control mechanism almost lost its effect.
Besides market factors, the geopolitical context is also changing. The US is said to be considering easing sanctions on Russian oil to stabilize domestic energy prices.
Meanwhile, in Europe, some countries are starting to renegotiate energy relations with Moscow as gas prices rise sharply due to the Middle East crisis.
However, the most notable thing is not the sharp increase in oil prices in the short term, but the cracks that are appearing in the Western sanctions system. If exemptions and exceptions continue to be expanded, what happened in the past 2 weeks of Iranian war could become a long-term turning point for the global energy market.
