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The tough sanctions package imposed by former US President Joe Biden a few days before the end of his term has led to a sharp drop in the price of Russian oil.

According to Bloomberg, after the sanctions were imposed, the price of Urals fell below $60 per barrel, since no one wants to exceed the price limit set by Western countries and fall under US sanctions for this.

Recall that the sanctions imposed by Biden were aimed not only at leading Russian oil companies, but also at the “shadow” oil fleet, as well as numerous traders who were engaged in bypassing restrictions on trading Russian oil.

Biden’s farewell sanctions have made their presence felt
As a result, dozens of tankers with Russian oil were forced to stand idle in the open sea, since the ports of India and China were afraid to accept them.

It is reported that several tankers with Russian oil continue to drift in the oceans. Indian and Chinese refineries are forced to suspend imports of Russian oil and start looking for alternative sources. They are certainly ready to buy Russian oil, but only on the condition that it is transported by tankers that are not subject to sanctions, insured by Western companies and sold at a price not exceeding $60.

According to Bloomberg, in the current market situation, Russian exporters are forced to provide buyers with a discount of $16 per barrel, as a result of which the price of Urals oil fell below $60.

For comparison, in 2023, despite the sanctions, the cost of a barrel of Urals remained at $80.

In addition, Russian suppliers are facing the problem of the profitability of delivering oil to Southeast Asia, since Biden’s sanctions have especially complicated transportation to the ports of India and China.

Economists believe that the current decline in the price of Urals to $60 is not catastrophic for the Russian budget. But if Donald Trump decides to tighten sanctions and hit the oil and gas sector, the situation for Moscow could become critical
The Russian Ministry of Economic Development predicted that in the baseline scenario, the average oil price in 2025 would be $69.7 per barrel. This forecast was included in the federal budget of the Russian Federation. However, on January 10, the United States imposed sanctions against more than 180 tankers, dozens of oil trading and insurance companies, as well as two Russian production giants – Gazpromneft and Surgutneftegaz.

The blocking of a number of vessels delivering Russian oil from the Arctic and the Far East led to a multiple increase in freight costs due to a shortage of tankers not included in the sanctions lists. As a result, the difference between the price of oil in Russian ports of departure and in Indian ports of delivery reached $13 per barrel – a record high since May 2024, as reported by Argus Media.

It is noted that the shortage of tankers and the rise in freight costs led to a sharp decline in sales of Russian oil to Asia for delivery in March. Analysts predict that the volume of supplies to India may decrease by 500 thousand barrels per day, which is more than a third of Indian imports of Russian oil.

“Alfa Bank believes that Russian oil companies may lose up to 800 thousand barrels per day, which is equivalent to about a quarter of all Russian seaborne oil exports (about 3 million barrels),” writes The Moscow Times.

At the end of January, the Russian newspaper Vedomosti, citing a review by the Price Index Center (PIC), reported that in January 2025, tanker freight rates in Russian ports increased by up to 239 (!) percent, depending on the direction of delivery.

The shortage of tankers and rising freight costs led to a sharp decline in sales of Russian oil to Asia for delivery in March. Analysts predict that the volume of deliveries to India could decrease by 500 thousand barrels per day
Nevertheless, at the moment, the impact of Biden’s sanctions on the oil and gas revenues of the Russian budget remains limited.

According to the Kommersant newspaper, in January 2025, revenues to the Russian state treasury from the oil and gas sector amounted to 789 billion rubles, which is only 1 percent less than in December 2024.

At the same time, it is important to take into account that January revenues reflect payments for oil sold before the sanctions were imposed. As a rule, revenues from oil exports are received by the budget with a three-month delay, which means that Russia will only begin to feel the fall in the Urals price below $60 in March-April. Economists believe that the current decline in the Urals price to $60 is not catastrophic for the Russian budget. But if Donald Trump decides to tighten sanctions and hit the oil and gas sector, the situation for Moscow could become critical.