The oil price spike won't fix Russia's strained finances, an analyst says

Oil prices jumped after fresh fighting in the Middle East raised fears of supply disruptions through the Strait of Hormuz. That kind of move would normally be a windfall for Russia, but Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis, wrote, "The current temporary spike, filtered through sanctions discounts and an unfavorable exchange rate, is unlikely to change the fundamental arithmetic." International benchmark Brent crude and US West Texas Intermediate were more than 3% higher, trading around $84 and $77.50 per barrel respectively late on Wednesday.

Both grades are around 35% higher this year. Russia's federal budget — and by extension President Vladimir Putin's war in Ukraine — relies heavily on oil and gas revenue. Moscow does not receive international benchmark prices for its crude: Urals oil trades at a sanctions-driven discount, and a strong ruble means each dollar of oil revenue converts into fewer rubles.

Russia

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