Oil Prices Fall as Middle East Tensions Ease

Oil prices slowed their decline slightly on Monday evening but remained deeply in the red on signs of de-escalation in the Middle East conflict.

October Brent futures on London's ICE Futures exchange were down 4.82% to $83.7 per barrel as of 19:00 Moscow time. September WTI futures on the New York Mercantile Exchange (NYMEX) had fallen 6.18% to $79.44 per barrel by that time.

Meanwhile, the intensity of tanker traffic through both the Strait of Hormuz and the Bab el-Mandeb Strait has decreased in recent days, according to ship tracking data. The UK Maritime Trade Operations (UKMTO) reported three attacks on tankers in the Strait of Hormuz area since Saturday.

Last Sunday, seven OPEC+ countries that voluntarily cut production in addition to their quotas (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman) decided to increase their oil production quotas for September by 188,000 barrels per day. This completed the return to the market of volumes cut earlier under the second phase of voluntary restrictions, totaling 1.65 million barrels per day.

Discounts on Russian Urals oil loaded at the country's western ports rose by $2.2-2.6 per barrel in July compared to June, while discounts for deliveries to Asia increased by $3.5-3.9 per barrel, according to data from pricing agency Argus.

At the same time, during July there was a noticeable rise in the price of Russian oil, i.e., a reduction in discounts, after the resumption of the conflict in the Middle East on July 8.

According to FinFly.News calculations, the price for calculating the mineral extraction tax (MET) in July was $59.02 per barrel. In June it was $63.52, in May $86.52, in April $94.87, in March $77, in February $44.59, and in January $40.95. The cutoff price under the budget rule for 2026 is $59 per barrel.

Interbank lending rates decreased compared to the previous trading day. According to Central Bank calculations made on August 3, the benchmark RUONIA rate for overnight loans fell by 4 basis points on Friday to 13.95% per annum. Term versions of RUONIA for 1, 3, and 6 months fell by 1 basis point on Monday to 14.37%, 14.4%, and 15.08% per annum, respectively.