Global Oil Price Drop to $40-50 Could Drastically Reduce Russia’s Income

A significant drop in global oil prices to $40–50 per barrel for Brent crude, driven by a new OPEC strategy, may drastically reduce Russia’s war budget.

The Gaze reports this, referring to Ukrinform.

In a comment to the Ukrainian media, energy analyst Hennadiy Riabtsev noted that the recently approved 18th package of EU sanctions against Russia’s oil exports does not introduce fundamentally new restrictions but closes loopholes previously exploited by Russian exporters to circumvent sanctions. 

The package includes new restrictions on 105 vessels of Russia’s so-called “shadow fleet,” bringing the total number of sanctioned tankers to over 440.

However, Riabtsev emphasized that the current sanctions regime affects only about 43–45% of Russian oil exports, as Moscow continues redirecting supplies to countries that have not joined international sanctions. 

The expert pointed out that current oil prices are artificially inflated by at least 30% due to previous OPEC and OPEC+ policies. 

However, under the newly adopted strategy, OPEC members plan to increase oil production to squeeze out high-cost producers, which include Venezuela, several African states such as Nigeria, and even some U.S. companies. Crucially, Russia is also among the high-cost producers.

If the new OPEC policy succeeds, the market surplus could drive Brent crude prices down to $40–50 per barrel (equivalent to around $30–40 for Russian Urals). 

According to Riabtsev, such a price shift would make Western sanctions far more effective, directly undermining Russia’s ability to finance its war against Ukraine.

As The Gaze reported earlier, U.S. Energy Secretary Chris Wright stated that sanctioning Russian oil could become a powerful tool in ending the Russian-Ukrainian war.