Oil prices fall as Trump tries to hurt Russia
8 August 2025 08:20
On Friday morning, world oil prices remained almost unchanged, but by the end of the week they are preparing for the most significant drop since the end of June. The reason was investors’ concerns about the impact on the global economy of new duties that came into effect on Thursday, "Komersant Ukrainian" reports citing Reuters.
According to OilPrice, as of 08:04 Kyiv time, September futures for Brent fell by 7 cents to $66.36 per barrel, and are headed for a weekly drop of more than 4%. US WTI fell by 12 cents, or 0.19%, to $63.76 per barrel, and could lose more than 5% in a week.
Analysts at ANZ Bank note that the increase in US duties against a number of trading partners raises concerns about a decline in business activity, which could reduce oil demand.
The market is already under pressure after the OPEC group’s decision last weekend to completely cancel most of the production cuts in September, which will take place several months earlier than planned.
As of Thursday, WTI has fallen for six consecutive sessions, repeating the record decline recorded in December 2023. If prices close in the red on Friday, it will be the longest downward streak since August 2021.
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How to hurt Russia
Political news put additional pressure on the oil market: On Thursday, the Kremlin confirmed that Russian President Vladimir Putin will meet with US President Donald Trump in the coming days, fueling expectations of a diplomatic settlement to the war in Ukraine.
At the same time, the new US duties against India for purchasing Russian oil partially restrained the price drop. However, according to StoneX analysts, this step is unlikely to significantly affect the volume of Russian oil exports to foreign markets.
On Wednesday, Trump also said that China, the largest buyer of Russian oil, could face similar duties to those currently imposed on Indian imports.
Russia is already hurting
It is well known that Russia is critically dependent on its energy exports. First of all, on oil exports. In 2024, the Russian federal budget revenues from oil sales amounted to 9.19 trillion rubles (approximately $89.4 billion). Total budget revenues for this period amounted to 36.71 trillion rubles. Thus, the share of oil revenues in the total structure of Russian budget revenues in 2024 was approximately 25%
This indicates that, despite international sanctions and attempts to diversify revenue sources, oil remains a key source of financing for the Russian budget.
Russian Urals oil is traditionally sold at a lower price than Brent and WTI, and it is also subject to additional factors that raw materials from other countries do not experience, namely Western sanctions. However, during all three years of the full-scale war with Ukraine, Russia has been successfully selling its oil – its main buyers today are China and India.
The federal budget of the Russian Federation for 2025 included an oil price of $70. However, according to the Ministry of Finance, on August 6, the price of Russian Urals was $64.96 per barrel. Against this backdrop, the Russian state budget deficit has already amounted to 4.88 trillion rubles, or 2.2% of GDP, and more than a trillion of this has been accumulated over the past month. This hole in the treasury is almost 4.5 times higher than in the same period in 2024, when the deficit was 1.1 trillion rubles, or 0.5% of GDP.
So far, market analysts’ forecasts do not promise Russia any serious problems related to the oil price, as it still has a very large backlash for sales. According to economic expert Oleg Pendzin, even a price of $50 per barrel is still acceptable for Russia.
“Currently, the direct cost of Russian oil production is about $37-38 per barrel. This is the direct cost. The critical figure for Russia is the sales price of $45,”
– the economist explained exclusively for .
So the more likely way to hurt Russia over oil is still to increase sanctions, including secondary sanctions against its buyers. The point of this step is to make it physically impossible for Russia to sell large volumes of oil and thus receive funds to continue its aggressive war of aggression.
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