Russia Oil Revenue Dented by Strong Ruble as Global Prices Jump
Russia is barely benefiting from the recent surge in oil prices because of its strengthening currency, keeping the Kremlin's revenue under pressure.
As hostilities between Iran and Israel lifted global oil prices, Russia's Urals crude rose to more than $60 a barrel on June 13, according to data from Argus Media Ltd. That meant it had recovered all but 10% of its losses since the start of the year.
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Yahoo
19 minutes ago
- Yahoo
Major analysts predict oil prices if Strait of Hormuz blocked
Major analysts predict oil prices if Strait of Hormuz blocked originally appeared on TheStreet. The world has gotten a bit crazy in 2025. An ongoing global trade war has sparked worries about worldwide economic growth, and now Israel and Iran are locked in a battle with missiles flying back and forth, threatening global oil supplies. The potential for a major energy crisis to develop because of the Iran-Israel conflict has caused Brent Crude and West Texas Intermediate oil prices to surge, and in turn that's created an entirely new threat to the economy. 💵💰💰💵 The potential for the battle in the Middle East to spread, potentially shutting off oil seaborne transports through the Strait of Hormuz and possibly removing Iranian oil from the global market, has lifted Brent crude and WTI crude per-barrel prices by 18% to $79 and 21% to $75 this month. The situation has captured the attention of Citigroup, JP Morgan and Goldman Sachs oil analysts, leading them to reset their oil price targets. President Donald Trump this year has unveiled a string of harsher-than-expected tariffs to rekindle US manufacturing. The moves, which include 25% tariffs on Mexico, Canada and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports, have forced economists to rethink their global projections for economic growth this instance, earlier this month the World Bank reduced its worldwide gross domestic product forecast to 2.3% from 2.7%, citing tariff uncertainty. Contributing significantly to the reduced outlook is a major downgrade of U.S. growth to 1.4% from 2.3%. The World Bank lowered its U.S. forecast for 2026 to 1.6% from 2%. The Federal Reserve also expects slowing growth in the US because of tariffs' bite. The Fed updated its closely watched Summary of Economic Projections on June 18. It expects unemployment to increase to 4.5% from 4.2%, and projects that Personal Consumption Expenditures inflation — its favored inflation benchmark — will climb to 3% this year from expectations in March for 2.7% inflation. Fed officials expect U.S GDP growth to be just 1.4% in 2025, down from 1.7% in March, and well below the 2.5% growth the US economy delivered in 2024. In China, the World Bank expects slowing activity due to higher tariffs to reduce GDP growth to 4.5% in 2025 from 5% in 2024. In 2026, it expects GDP growth to ease to 4%. The economic situation could get even more uncertain if the Israel-Iran conflict continues to prop up crude oil prices. Oil prices can significantly increase inflation, directly and indirectly, further crimping consumer and business spending. We're already seeing concerning signs that higher oil prices are translating into higher prices at the pump for gasoline. "WTI crude oil $77/barrel, the national average price of gasoline is now $3.21 per gallon and could by next week climb to its highest ever while President Trump has been in office ($3.25/gal)on due to Middle East tensions," wrote GasBuddy's Patrick De Haan on X. Roughly 18 million to 19 million barrels of oil flow through the Strait of Hormuz daily, representing 20% of global oil consumption, including crude, condensates and fuel. Its proximity to Iran means it could become an oil chokepoint if Iran acts to block it. The possibility of that happening is "under serious consideration,' said Esmail Kosari, an Iranian parliament member and IRGC general, on June 15. More Economic Analysis: Federal Reserve prepares strong message on long-term interest rates Massive city workers union approves strike Analyst makes bold call on stocks, bonds, and gold Iran's oil production and its ability to export oil to its largest consumer, China, might also be significantly impaired. Iran is OPEC's third-largest member, producing about 3.3 million barrels per day. Citi estimates that if the conflict disrupts 3 million bpd for multiple months, crude oil prices could reach $90 a barrel from $75 now and from the low-to-mid $60s before Israel attacked Iran over its nuclear-development program. JP Morgan's analysts say that shutting the Strait of Hormuz could catapult crude oil prices to an eye-popping $120 to $130 per barrel. Goldman Sachs, meanwhile, says the conflict creates a risk premium of about $10 a barrel. In one scenario, Goldman Sachs's analysts say that if Iran's export infrastructure is damaged to the point that Iran's supply is reduced by 1.75 million barrels a day, "before gradually recovering," and with OPEC+ production offsetting roughly half the reduction, Brent Crude oil would peak at "just over $90/barrel." Goldman Sachs, however, expects that the increase would prove temporary, with prices declining "back to the $60s in 2026 as Iran supply recovers." However, the situation would be worse if the Strait of Hormuz were blocked for an extended period. "While an interruption of trade through the Strait of Hormuz, through which nearly 1/5 of global oil production flows, appears much less likely, there is focus from investors and policymakers on this risk, because core OPEC+ producers may be unable to deploy spare capacity in this extreme tail scenario," Goldman's analysts wrote. "Based on our prior analysis, we estimate that oil prices may exceed $100/barrel in an extreme tail scenario of an extended disruption."Major analysts predict oil prices if Strait of Hormuz blocked first appeared on TheStreet on Jun 20, 2025 This story was originally reported by TheStreet on Jun 20, 2025, where it first appeared.
Yahoo
37 minutes ago
- Yahoo
Trump's Airstrikes on Iran Leave Oil Market Poised for Surge
(Bloomberg) -- The oil market has been wrestling for days with Donald Trump's next act in an escalating Middle East conflict. Now American jets have struck Iran's three main nuclear sites, a move that leaves traders preparing for a price surge — but still guessing where the crisis goes from here. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown In a wild week, Brent futures have jumped 11% since Israel attacked its nemesis, but with sharp moves up and down from one day to the next. That rise is expected to restart on Monday, after the US assault — which targeted sites at Fordow, Natanz, and Esfahan — dramatically raised the stakes in a region that accounts for a third of global oil output. From frenzied options markets, to soaring freight and diesel pricing, to a radical redrawing of crude's pivotal forward curve, all of that volatility is expected to intensify in the week ahead. 'Much depends on how Iran responds in the coming hours and days — but this could set us on a path toward $100 oil, if Iran responds as they have previously threatened to,' said Saul Kavonic, an energy analyst at MST Marquee. 'This US attack could see a conflagration of the conflict to include Iran responding by targeting regional American interests that include Gulf oil infrastructure in places such as Iraq, or harassing passage through the Strait of Hormuz.' The maritime chokepoint at the mouth of the Persian Gulf is a vital conduit for not just Iranian shipments, but also for those from Saudi Arabia, Iraq, Kuwait and other members of the Organization of the Petroleum Exporting Countries. Central to everything is the Trump administration's ultimate intention in Iran, having joined Israel's attack. At one stage last week, it appeared more a question of when than if. That then changed late Thursday, when the US president said he'd mull his decision for two weeks. Then in the early hours of Sunday, Iranian time, he announced that Fordow, Natanz, and Isfahan were struck, and described a 'payload of BOMBS' dropped on Fordow, a key location of uranium enrichment. 'The market wants certainty, and this now firmly pushes the US into the Middle East theater,' said Joe DeLaura, a former trader and global energy strategist at Rabobank, adding prices were now expected to rise when oil reopens. 'But I think that this means the US Navy will be tasked to keep the Strait open,' he said, adding prices could head into the $80-to-$90 a barrel range. Still, so far there has been little sign of disruption to oil flows from the region. 'Should the US provide direct military support to Israel and play its part in removing the current regime the initial market reaction will be a price spike,' said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd, said at the end of last week. But his firm's expectation is that oil will not become part of the conflict because it's not in the interests of either side. The fate of oil matters because it drives fuel prices and inflation — something Trump said he would quell when he was campaigning for office. In times of extreme volatility, shortages of oil have even precipitated recessions. So far, there's been no meaningful curtailment through the Strait of Hormuz, through which about a fifth of the world's produced and consumed oil flows every day. Indeed, Iran even appears to be racing to lift its exports as part of its logistical response to the conflict. Avoiding a wider conflagration and preventing disruptions to supply would push oil prices lower, while also bringing down everything that spiked in tandem with them. Against that, America joining could be all-defining, calling into question security through the waterway and from the region at large. On Friday, Iran said it might consider adjustments to its enrichment program, driving down futures and reminding the world that Tehran's actions are important to petroleum markets too. Among assets roiled by the tension are options contracts, where traders paid enormous premiums to hedge against further price spikes. At times since the conflict began, they paid the most to protect against a rally since at least 2013. Record volumes of bullish call options have changed hands since the attacks started. Exiting Trades The market, though, was on edge even before Trump's announcement. Traders have been exiting futures positions at one of the fastest rates on record — an indication of both the stress that higher levels of volatility is placing on derivatives books, and the unpredictable path ahead. In total, the number of futures contracts held on the main exchanges plunged by the equivalent of 367 million barrels, or about 7%, since the close on June. 12, the eve of Israel's attack. Traders and brokers say the higher levels of volatility have made pricing deals harder over the past week. 'Traders and analysts should be viewing the current oil price gyrations in the context of speculative de-risking,' said Ryan Fitzmaurice, senior commodities strategist at Marex Group Plc. 'Going forward, market volatility and open interest will be key areas to watch.' The cost of hiring a ship to carry crude from the Middle East to China has jumped close to 90% since before Israeli attacks began. Earnings for vessels carrying fuels like gasoline and jet fuel have also leaped, as have insurance premiums. The danger to vessels in the region's waters was underscored when two oil tankers crashed into each other causing a fiery explosion — though on this occasion, the ship's owner asserted there was no link to the conflict. Still, almost 1,000 ships a day are having their GPS signals jammed, creating growing safety risks. The MICA Center, a French liaison between the military and commercial shipping, said the tanker crash was likely 'aggravated' by jamming. 'Next days will be critical in determining whether a diplomatic solution with Iran is possible and if the US might resort to military action,' it said in an update. 'Maritime trade is not being targeted. The situation might change abruptly.' The risk to flows from the region, coupled with the sharp increase in shipping costs, is bolstering demand for crudes from outside of the Persian Gulf. Pullback Risk The higher different prices race, the greater the risk of a pullback if the prospect of de-escalation takes shape. And even if tensions do remain high, there's precedent from a few years ago for a meaningful supply disruption to quickly get resolved. When an attack in 2019 on processing facilities at Abqaiq in Saudi Arabia knocked out 7% of global supply, it took just a few weeks for crude futures to trade lower than before the attacks occurred, as supplies were quickly restored and backfilled. That's one reason, coupled with a persistent threat of geopolitical risks that often don't morph into real supply curbs, why traders say prices haven't spiked more in recent days. 'This is the big one,' said John Kilduff, a partner at Again Capital, pointing to a $8-a-barrel risk premium as plausible. 'The market default on this development is higher. How high depends on Iran's response — or the realistic prospects of a meaningful response, which may not be there.' --With assistance from Stephen Stapczynski, Julia Fanzeres and Mia Gindis. (Writes through after Trump announces attack.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©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
Bloomberg
an hour ago
- Bloomberg
Ether Leads Crypto Selloff as US Attacks Nuclear Sites in Iran
Ether fell sharply while Bitcoin held steady after President Donald Trump said American bombers and missiles had struck Iran's three main nuclear sites. The second-ranked token fell as much as 7.7% on Sunday morning in Asia to about $2,200, its lowest intra-day level since May 9. Bitcoin briefly dipped below $101,000 but pared losses to trade relatively evenly in the aftermath of the attacks.
