Russia’s Oil Export Revenues Squeezed as Ukraine Strikes Hit Key Terminals

Russia’s oil export machine is showing fresh strain, as Ukrainian strikes on critical loading infrastructure and a tightening sanctions net combine to push key export volumes to record lows — even as elevated global oil prices from the separate Iran conflict have offered Moscow a partial, and increasingly fragile, offset.

Loadings Collapse at Key Ports

The clearest sign of the pressure is at Tuapse, a Black Sea port that has been under sustained drone attack since May and loaded almost no oil products for a second consecutive month in July, according to the Centre for Research on Energy and Clean Air’s monthly tracking of Russian fossil fuel exports. Loadings at the port fell a further 23% in July to just 4.7 million tonnes — their lowest level on record and less than half the 9.6 million tonnes loaded in July of the previous year.

The disruption intensified following Ukraine’s July 19 drone strike on the Caspian Pipeline Consortium’s marine terminal near Novorossiysk, after which only one oil shipment was loaded between July 22 and 26, with total monthly loadings at the port dropping 23% month-on-month. With refinery throughput still depressed and domestic demand taking priority — jet fuel, diesel, and gasoline all remain under an export ban — the continued slide points to a further fall in oil product revenues in August.

Urals Crude Trades Well Above the Price Cap

Prices tell a more nuanced story. The average price of Russia’s benchmark Urals-grade crude fell 3% month-on-month to $60.22 per barrel in July, still significantly higher than the EU and UK price cap of $44.1 per barrel that took effect in February. The gap between the market price Russia is actually realising and the Western-imposed cap illustrates how the broader oil-market disruption from the separate Iran conflict has, paradoxically, given Moscow more room above the sanctions ceiling than it has enjoyed for much of the past two years.

That relief has been substantial in dollar terms. Oil export earnings rose from an average of $10.4 billion per month in January-February to $19.1 billion in March, $21.5 billion in April, and $20.8 billion in May, according to a mid-year assessment by the Kyiv School of Economics Institute, as the Iran war’s disruption to global energy flows lifted prices broadly and, by extension, Russian revenue even as sanctions architecture remained largely unchanged.

Sanctions Circumvention Under Scrutiny

Enforcement efforts continue to target the shadow fleet and its supporting ecosystem. The Georgian port of Kulevi — whose refinery has run solely on Russian crude and has not received a single shipment of non-Russian crude since opening operations in October 2025 — has said it will stop accepting Russian oil as of August or September, after a new sanctions package introduced a transaction ban on the refinery for processing and trading Russian crude, effective after a six-month wind-down period. CREA’s analysis suggests Kulevi and the nearby port of Batumi have been exporting refined products suspected of containing Russian-origin molecules to jurisdictions that maintain sanctions on Moscow.

Washington Escalates With a New Sanctions Bill

The pressure from Washington has grown more concrete as well. The US Senate passed legislation dubbed the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” which sets up to 100% tariffs on major nations importing Russian oil and gas. The bill’s supporters argue it will have a ripple effect across Russia’s economy by deterring countries from trading with Moscow, given that Russia’s fossil fuel exports earn the country roughly 734 million euros a day and remain the central pillar of its war financing.

Russia’s embassy in Washington has condemned the legislation, pointing to the knock-on energy constraints already caused by the US-Israel war on Iran and warning that further sanctioning of Russia’s trading partners risks compounding an “impending energy crisis” ahead of US midterm elections.

The Bigger Fiscal Picture

Even with the Iran-war windfall, Russia’s broader economic trajectory remains under pressure. Growth is projected at just 0.4% for 2026, worse than the 1% recorded in 2025, and authorities have moved to hike taxes — including raising VAT from 20% to 22% — to shore up a budget strained by continued military spending. Analysts at KSE Institute frame the coming months as a fork in the road: a prolonged global oil crisis would continue supporting Russian export and budget revenues without resolving the domestic fuel crisis, while a faster return of the oil market to surplus would expose Russia more fully to lower revenues and mounting fiscal pressure.

Key Takeaways

• Ukrainian drone strikes on Novorossiysk and Tuapse have pushed Russian oil product loadings to record lows in July.
• Urals crude averaged $60.22 a barrel in July, still well above the $44.1 Western price cap, thanks to the separate Iran-war oil-price shock.
• Russian oil export earnings roughly doubled from January-February levels through the spring, even as sanctions enforcement tightened elsewhere.
• The US Senate passed a bill threatening up to 100% tariffs on countries importing Russian oil and gas.
• Russia’s own 2026 growth forecast stands at just 0.4%, with authorities raising VAT to shore up war-strained public finances.

Frequently Asked Questions

Why have Russian oil exports fallen at key ports? Ukrainian drone strikes on the Caspian Pipeline Consortium terminal near Novorossiysk and on the port of Tuapse have severely disrupted loadings, pushing volumes to record lows in July 2026.

Why is Russia’s Urals crude trading above the Western price cap? The Iran war’s disruption to global oil markets has lifted prices broadly, allowing Russia to sell Urals crude at $60.22 a barrel — well above the $44.1 EU/UK price cap — despite ongoing sanctions.

What new US legislation targets Russian oil buyers? The US Senate passed the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” which authorizes tariffs of up to 100% on countries that import Russian oil and gas.