Kremlin panics as Russian Urals crude oil price nears crucial $50 mark
The Kremlin on April 7 announced it is 'closely monitoring' oil markets after the price of its key export grade, Urals crude, plunged towards the $50 mark.
'We are very closely monitoring the situation, which is currently characterized as extremely turbulent, tense, and emotionally overloaded,' Kremlin spokesperson Dmitry Peskov told Interfax.
Peskov attributed the price decline to "the US decision to introduce tariffs for most countries in the world."
Urals crude fell to $52.76 per barrel at the Baltic port of Primorsk on Friday, according to Argus Media data cited by Bloomberg.
This is well below the $70 per barrel benchmark used for Russia's 2025 budget planning.
With oil and gas revenues accounting for nearly 30% of budget proceeds in January-February, according to government data cited by Bloomberg, the price decline poses significant fiscal challenges.
A price collapse could destabilize Russia's federal budget, as military expenditures for the Ukraine conflict have driven government spending sharply upward in early 2025.
If prices fall below the $50 mark, it would push Russia's key oil export to its weakest level in nearly two years.
As recently as late March, global oil prices were actually rising, driven by U.S. sanctions on Iran and ongoing discussions on a potential ceasefire in Russia's war in Ukraine, with Brent crude reaching $72.52 a barrel, while U.S. West Texas Intermediate crude increased to $68.68.
Despite this, Russian oil and gas revenue fell by 17% year-on-year in March to 1.08 trillion rubles ($12.8 billion), as forced discounts on crude and a stronger ruble hit budget inflows, the Moscow Times reported on April 3, citing Russia's Finance Ministry data.
The ministry said the government lost roughly 230 billion rubles ($2.7 billion) in tax income compared to March 2024, with oil and gas revenues accounting for one-third of the total state income.
Energy revenues remain a key source of financing for the Kremlin's war against Ukraine, despite Western sanctions and a price cap designed to limit Moscow's earnings from oil exports.
Read also: US increasingly polarized over Ukraine support as Trump's 'America First' deepens party divide
We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
38 minutes ago
- Yahoo
Ukraine shoots down nearly 500 drones, missiles in Russian record strike, Air Force says
Ukraine's Air Force said on June 9 that it intercepted a total of 479 Russian drones and missiles during a record-high wave of strikes overnight. According to the official statement, Russia launched 499 weapons, including 479 Shahed‑type attack drones and various decoy drones, four Kh‑47M2 "Kinzhal" air-launched ballistic missiles, 10 Kh‑101 cruise missiles, three Kh‑22 cruise missiles over the Black Sea, two Kh‑31P anti‑radar missiles, and one Kh‑35 cruise missile from occupied Crimea. Ukraine had reportedly neutralized 479 of the incoming targets, with 292 were shot down, and 187 jammed or lost via electronic warfare. In Kyiv Oblast, air‑raid sirens lasted over ten hours, according to Governor Mykola Kalashnyk. Air defences shot down Russian drones. No civilian casualties were reported. Two houses, a car, and an outbuilding in Boryspil district were reportedly damaged. In Rivne Oblast, Governor Oleksandr Koval described the night as very heavy. One civilian was reportedly injured. The attack, according to Koval, was the largest since the beginning of Russia's full-scale war. In Zaporizhzhia Oblast, one person was injured, according to Governor Ivan Fedorov. Over the day, 498 strikes reportedly struck 14 populated areas. In Kherson Oblast, numerous towns were hit by drones, artillery, and airstrikes. Three apartment blocks, 13 houses, a farm, and vehicles were damaged. Four civilians were injured, the governor said. In Kharkiv Oblast, nine villages were hit. Seven civilians suffered minor injuries, according to Governor Oleh Syniehubov. Russian forces reportedly used 22 unguided aviation rockets, 18 guided bombs (KAB), 6 Geran (Shahed) drones, 4 unspecified UAVs, and 1 Molniya drone. Civil damage included houses, a store, a camp, and vehicles. In Dnipropetrovsk Oblast, Ukrainian defences downed six UAVs at night, Governor Serhii Lysak said. A farm, houses, and vehicles in the region were reportedly hit. In Sumy Oblast, Russian forces launched nearly 90 strikes across 35 settlements, injuring nine civilians, local authorities reported. Shops, a school, homes, and cars were reportedly damaged. Authorities evacuated 21 people. In Cherkasy Oblast, air defences shot down 33 Russian drones overnight. No injuries were reported, but falling debris damaged four houses, a farm outbuilding, and a car in the Cherkasy district. Read also: Ukrainian drones hit Russian electronic warfare facility in Chuvashia Republic, military says We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Business Insider
an hour ago
- Business Insider
Russian president Vladimir Putin stamps his approval on the Russian-Congo oil pipeline
Russia and the Republic of Congo have enjoyed a growing relationship in recent years, which appears to be strengthening, as evidenced by a recent agreement between the two countries, spearheaded by Russian President Vladimir Putin. Russia and the Republic of Congo have entered into a collaborative agreement for constructing the Pointe-Noire-Loutete-Maloukou-Trechot petroleum pipeline. The project, ratified into law by President Vladimir Putin, aims to bolster the energy security of Congo and establish a sanctions-resistant distribution channel. Construction of the pipeline is projected to span 3 years, with an operational lifespan between 30 and 40 years. Russian president Vladimir Putin recently ratified a deal to work with the Congo on building the Pointe-Noire-Loutete-Maloukou-Trechot petroleum product pipeline in the African nation by signing a bill into law. The project links Loutété, Maloukou, and the coastline of Pointe-Noire, three Congolese towns. The agreement was initially signed on September 28, 2024, in Moscow, Russia's capital. According to Russian Deputy Energy Minister Dmitry Islamov, the deal aims to help make Russia the region's vital energy security partner while building a sanctions-proof petroleum product delivery route, as reported by Interfax. "The implementation of the agreement will enable the Congo to ensure uninterrupted and stable supplies of petroleum products to the capital region, reduce logistics costs, gain the status of a key player in ensuring the region's energy security - including the Democratic Republic of the Congo and the Central African Republic - and create additional jobs," Islamov said while presenting the bill to the State Duma. "For Russia, this means expanding high-tech exports, creating an additional sanctions-resistant petroleum products distribution channel, and securing status as the region's strategic energy security partner," he added. Back in April, the Congolese National Assembly approved the project. Following that, the Russian State Duma ratified the agreement on the construction, as the deadline for the project was disclosed by Deputy Minister of Energy Dmitry Islamov. The deputy minister also added that the project would be completed in 3 years and its operations would last between 30 to 40 years. Russia and Congo Back in July 2024, Russia and Congo agreed to cooperate in hydropower and peaceful nuclear energy. Later that year, they reached a provision agreement to construct the oil pipeline mentioned above. According to the Congolese government, a joint venture would be formed to build the pipeline, with Russia owning 90% of the company.
Yahoo
an hour ago
- Yahoo
Oil & Gas Deals Are Tanking. The World's Top M&A Law Firm Has Been Here Before
(Bloomberg) -- Kirkland & Ellis spent a decade building a billion dollar-plus energy and infrastructure business and becoming the top legal adviser for US oil and gas deals. It was perfectly placed to benefit from Donald Trump's 'drill, baby, drill' agenda. Next Stop: Rancho Cucamonga! Where Public Transit Systems Are Bouncing Back Around the World Trump Said He Fired the National Portrait Gallery Director. She's Still There. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Then, the US president's global trade war tanked the price of crude and stifled transactions in the country's oil patch, which are down by more than 40% this year, Bloomberg-compiled data show. Kirkland has also found itself among firms caught up in the US government's attacks on big law. With Brent crude hovering around $65 a barrel, Kirkland is looking at other corners of the energy industry, as well as adjacent areas, to help plug the gap. It's notched some big wins this year, including working on one of the largest deals of 2025: Constellation Energy Corp.'s near-$30 billion takeover of power station operator Calpine Corp. Diversifying away from fossil fuel clients has become more pressing for Kirkland after multiple consolidation waves in the sector reduced the number of listed drillers and pipeline operators the firm can tap. 'It's kind of a dwindling business from a public company perspective,' partner Sean Wheeler said. 'It's kind of incumbent upon us to try to expand our remit a bit.' Kirkland's energy and infrastructure business generated about $1.5 billion last year, or roughly 15% of group revenue, people familiar with the matter said—with the US being the main engine. That figure is up from just $30 million in 2014, when Kirkland first arrived in Houston. The firm is seeking more of a foothold in mergers and acquisitions internationally and, for many at the firm, the story of its foray into the heartland of American oil provides a blueprint for how it might try to conquer new markets. A Complete Unknown Back in the spring of 2014, there were plenty of reasons to be skeptical about Kirkland's efforts to break into energy M&A. Founded in Chicago in 1909, the firm had long been an established player in Washington, DC and on Wall Street, but was a completely unknown entity in Texas, where law firms like Vinson & Elkins and Baker Botts dominated. The handful of Kirkland lawyers who landed in Houston to launch the firm's energy practice already had return tickets to Chicago in their pockets in case things didn't work out. 'People around town would ask 'who is Kirkland? What are you guys doing?',' recalls Kyle Watson, a partner at the firm who was among the first on the ground in the Lone Star state and is still based there. To help fix that, Kirkland poached Andrew Calder from Simpson Thacher & Bartlett in Houston and tasked him with leading the build out. A Scotsman with a thick accent, Calder brought strong connections to the likes of Blackstone Inc. and KKR & Co. and had a track record of advising leading energy companies. On his watch, Kirkland prioritized hiring local talent to show it wasn't just, as Calder puts it, 'a bunch of guys with funny accents that were hard chargers and only wanted to do private equity.' Those early recruits included Will Bos from Vinson & Elkins and David Castro from Baker Botts. Shortly after opening a 1,000 square foot office in Houston, Kirkland booked the late county singer Jerry Jeff Walker — best known for his 1968 song 'Mr. Bojangles' — to perform at an event at the annual North American Prospect Expo. The concert was designed to announce the firm's arrival on the scene. 'I was so nervous,' says Calder, 46. 'We were, like, is anybody going to show up?' They did, and Kirkland was soon advising on deals for new buyout clients, as well as strategic players such as C&J Energy Services Inc. The small group of Houston attorneys would ask colleagues in New York to chip in as they jumped from one transaction to the next. 'There was no time to take a breath,' said Watson. 'You were just trying to get deal done, get deal done, get deal done.' What Kirkland didn't envisage was that M&A in the sector would halve in 2015, as excess oil supply sent crude prices crashing. Bankruptcies ensued and, overnight, the firm found itself in demand because of its reputation as a restructuring specialist. Weil Gotshal & Manges, another prominent adviser in distressed situations, had left an opening by scaling down its presence in Texas. Bonanza Creek Energy Inc., Energy Future Holdings Corp. and Midstates Petroleum Co. were among those that came knocking. Some remained clients of Kirkland and kept the firm on speed dial when M&A work returned. 'Good timing played a big part in that initial success,' said Justin Stolte, a partner Latham & Watkins — one of Kirkland's main rivals in US energy dealmaking. 'But from that point forward they made their own luck.' US energy deals slowly began climbing, and hit a new record in 2018. By then, Kirkland was a top three adviser in the sector when measured by number of transactions and was branching out, working on more infrastructure deals as private equity firms sought out ways to benefit from a transition to cleaner forms of energy. It was also still hiring lawyers, with the promise of a fast-track to partner: Associates typically enter Kirkland's non-equity partnership after six years, assuming leadership roles that competitors would make available later. Wheeler, a public company attorney, agreed to join Kirkland in the summer of 2018 from Latham. He's since brought in multibillion-dollar deals from the likes of Marathon Oil Corp., ONEOK Inc. and others. 'Kirkland is pretty entrepreneurial,' said David Foley, a Blackstone senior managing director and a long-time client. 'They evaluate stuff and if they decide that it's a good business and a growing one, and they're not in it, they can make decisions to really commit the firm's capital to hire top-notch talent.' 'Dog Fight' Kirkland hit the top of the legal advisory rankings for US energy deals by value for the first time in 2022, Bloomberg-compiled data show. It slipped back to eighth the following year after missing out on the mammoth Exxon Mobil-Pioneer and Chevron-Hess deals, before reclaiming the number one spot in 2024 thanks to its role advising local giant Marathon on its roughly $23 billion takeover by ConocoPhillips. At the most recent NAPE summit in February, Kirkland partners no longer needed to worry whether anyone would show up. This year, the firm handed out neckties emblazoned with oil-related motifs — instantly recognizable to longtime attendees of the expo. For years, rival Vinson & Elkins had given away the same promotional swag, with oil execs sometimes wearing them in television interviews as an insider nod to the event. Vinson retired the neckties during the pandemic as fewer people donned formal officewear, but Kirkland decide to bring them back. The line to grab one was longer than the queue for a neighboring stall, which was giving away free cigars. 'It's a dog fight down here, it really is,' said Calder. 'So far, we've been on the right side of it.' Both Kirkland's energy and transactional groups fall under the purview of Calder, who sits on Kirkland's 20-person executive committee and helps Chairman Jon Ballis run the firm together with other equity partners. Ballis and his lieutenants often reach key decisions through informal conversations, rather than via committee meetings — an approach that insiders say allows Kirkland to move quickly in competitive situations. In May, Kirkland poached a group of lawyers from Skadden Arps Slate Meagher & Flom after putting together an offer in just 24 hours. 'Time is the enemy of all deals and this is our kind of deal,' Ballis said of the hires. Kirkland's energy and infrastructure division now houses roughly 550 staff spread across the US and beyond. Public companies account for around 30% of its energy dealflow, according to people familiar with the matter, who asked not to be identified discussing confidential information. In some ways, Kirkland has become a victim of its own success in Houston. In a close-knit industry town, the firm can sometimes find itself facing a tough choice of whether to work for a strategic or private equity client in an M&A situation. And picking up more mandates in areas like infrastructure and industrials can be more of a challenge from Texas, according to Wheeler. 'There is a bit of a marketing issue for us when trying to expand into different sectors,' he said. 'People see you in Houston, they think all you know how to do is drill well.' Kirkland's Houston crew has picked up some other big mandates away from pure-play oil and gas this year, advising Brookfield Infrastructure Partners LP on its $9 billion acquisition of fuel pipeline company Colonial Enterprises Inc. and helping Blackstone Infrastructure on its $11.5 billion purchase of New Mexico utility owner TXNM Energy Inc. Growth outside of the US has been harder to come by, despite efforts to capture more international business with new hires and offices abroad. Although the top law firm for deals globally, Kirkland ranked eighth for legal advice on transactions outside the US last year, Bloomberg-compiled data show; in the energy and industrials sectors, it wasn't in the top 10. Calder cites the Middle East and China as regions where the firm might look to do more. What happens next at Kirkland is likely to be overseen by someone other than Ballis, who, at 56, is nearing the age of 60 at which the firm expects partners to start winding down and relinquish seats on its executive committee. Calder is considered a strong contender to succeed him, people familiar with the matter said, with litigation partner Andrew Kassof another name that regularly comes up. Ballis has some words of advice for running the firm. 'You just keep waiting to see where's the ball bouncing and we keep running with it,' Ballis said. 'As long as it keeps bouncing the right way.' --With assistance from Alex Tribou. The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again Is Elon Musk's Political Capital Spent? What Does Musk-Trump Split Mean for a 'Big, Beautiful Bill'? Cuts to US Aid Imperil the World's Largest HIV Treatment Program ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
