Russia’s oil blend price in rubles for March is currently 24% below the 2025 federal budget target. This drop is attributed to a stronger ruble and lower global oil prices. The ruble has gained value this year, rising from a low of 113.75 rubles per $1 in December 2024 to 83.92 rubles now, driven by hopes for a resolution to the Ukraine conflict.
A potential ceasefire in the Russia-Ukraine war could negatively impact oil prices if former President Donald Trump advocates for lifting sanctions on Russia’s energy sector. Tyler Richey, co-editor of Sevens Report Research, told MarketWatch that a ceasefire might reduce the “fear bid” in the oil market. Sanctions imposed by the Biden administration have tripled the number of sanctioned Russian crude oil tankers, impacting about 900,000 barrels per day (bpd). Although Russia may attempt to bypass these sanctions by using more shadow fleet tankers and ship-to-ship transfers, Standard Chartered predicts that around 500,000 bpd will be displaced in the next six months.
In related developments, the European Union has proposed resuming Russian pipeline gas imports as part of a potential peace agreement in the Russia-Ukraine conflict. Supported by Hungarian and German officials, the idea suggests that such a move could provide incentives for both Russia and Europe to maintain a peace deal while stabilizing Europe’s energy market. European gas imports from Russia have significantly decreased, from approximately 450 million cubic meters per day (mcm/d) at the end of 2021 to about 150 mcm/d today. The proposal was a key topic during London’s International Energy Week. The Financial Times reported that the former head of Nord Stream 2’s parent company is considering restarting the pipeline, with U.S. businesses potentially acting as intermediaries between Russia and European consumers. However, Standard Chartered warned that such a plan would require multiple approvals and may not guarantee improved reliability or supply security for Russian gas flows.
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