Tuesday, July 7, 2026
Russia's Oil Windfall Vanishes As Urals Crashes To $42 A Barrel
By Charles Kennedy of OilPrice.com
Russian crude oil prices have fallen back to where they were before the Middle East war, with its flagship Urals averaging just $41.66 a barrel during the first three days of July.
The drop wipes out the revenue boost Moscow received from the conflict and pressures a federal budget that assumes oil prices of about $59 a barrel.
Urals had averaged more than $59 a barrel every month since March and climbed to $60.92 in June after the U.S. and Iran reached an agreement to restore shipping through the Strait of Hormuz. Higher prices gave the Kremlin room to replenish its reserve fund for the first time in nearly a year and delay planned spending cuts. With Urals now back near $42 a barrel, that relief could be short-lived. Oil and gas account for roughly one-third of Russia’s federal budget revenues.
Reuters reported Monday that a European intelligence assessment warned the country’s banking sector is becoming increasingly vulnerable after years of war-driven lending, with rising bad loans and deteriorating asset quality risking a wider financial crisis.
According to the assessment, Russian banks have absorbed much of the financial burden of the war by extending subsidized loans to defense contractors, state-backed companies and households. The report estimates that roughly 10% of corporate loans are now considered doubtful, while some major lenders have retail non-performing loan ratios as high as 15%. It also cites more than 500,000 personal bankruptcies in 2025.
Ukraine also continues with campaigns targeting Russia’s energy infrastructure. Bloomberg reported Monday that drones were intercepted near the Baltic ports of Ust-Luga and Primorsk, two of Russia’s key crude export hubs. There were no reports of damage or disruptions to oil exports.
https://www.zerohedge.com/markets/russias-oil-windfall-vanishes-urals-crashes-42-barrel
Saudi Arabia weighs GCC-Iran reconciliation summit - Saudi outlet
Saudi Arabia is considering hosting a reconciliation summit between Persian Gulf states and Iran, though no official participants from either side have been confirmed and no clear framework has been set, House of Saud reported Monday.
House of Saud, a geopolitical analysis and intelligence outlet focused on Saudi Arabia, said internal divisions within the Gulf Cooperation Council (GCC) and uncertainty over Iran’s decision-making authority were among the main obstacles to such a summit.
Aoun defends Lebanon’s presence at Khamenei funeral before US visit
Lebanese President Joseph Aoun defended Lebanon’s decision to send a minister to Ali Khamenei’s funeral, as he prepares for a White House meeting with US President Donald Trump later this month.
“Our diplomatic relations with Iran continue and are not severed,” Aoun said in an interview with Lebanese daily An-Nahar.
He also defended the agreement with Israel, saying it was "not ideal," but a reflection of the current balance of power in southern Lebanon.
Aoun's visit to Washington is aimed at advancing the deal's framework, which includes a phased security transition, with the Lebanese army taking exclusive control of specific towns to facilitate incremental Israeli withdrawals.
Iran state media says tanker attacked after ignoring warnings
Iran’s state broadcaster IRIB, citing anonymous sources, said an oil tanker attacked in the Strait of Hormuz was targeted after attempting to pass through the Omani route with support from the US Navy.
The vessel was attacked after “ignoring repeated warnings,” IRIB reported.
The broadcaster added that no Iranian official has yet confirmed or denied the account.
Iran has warned ships against transiting the Strait of Hormuz through the southern route in Oman’s waters, insisting that all passage through the strategic waterway must be coordinated with its military.