INVESTIGATION: Oil below $75 — how the US-Iran deal is reshaping Moscow's war

A week of record lows

In one week of June 2026, the global oil market underwent a spectacular transformation. On June 22, 2026, Brent crude fell to 77.90 USD, a decline of 3.3% — breaking below 80 USD for the first time since the start of the Ukrainian conflict. Three days later, on June 25, WTI (West Texas Intermediate) plunged 4.3% to 70.05 USD — its worst single-day decline in three months.

Brent returns to its pre-war level — below 75 USD per barrel — after having exceeded 115 USD in April 2026. In a matter of weeks, the market erases months of tension-driven expectations. Goldman Sachs lowers its Brent forecast for the fourth quarter of 2026 from 90 to 80 USD. This is not a technical correction — it is a paradigm shift.

The US-Iran deal as the primary trigger

The triggering factor is the diplomatic agreement between the United States and Iran. The US Treasury grants a 60-day waiver on Iranian oil and petrochemical sanctions, valid until August 21, 2026. This diplomatic gesture opens the door to a partial return of Iranian oil to the global market — adding millions of barrels to an already rising supply.

For the IMF, which noted on June 25, 2026 that "energy and commodity prices are falling after the Iran deal but normalisation will take time", the dynamic is underway but incomplete. For Putin's Russia, whose war budget depends directly on oil revenues, this dynamic is an ongoing catastrophe.

Oil below 75 dollars — that is what American diplomacy can do when it decides to use markets as an economic weapon. Not a single missile, not a single soldier. Just a 60-day waiver on Iran. And Putin loses billions.

OPEC+: the third consecutive increase

OPEC+ approved a production increase of 188,000 barrels per day (bpd) for July 2026 — the third consecutive increase since March 2026. This figure may seem modest on a global market of 100 million bpd, but it adds to previous increases to create a progressive supply pressure that weighs on prices.

The OPEC+ decision to continue increasing production reflects diverging interests within the cartel. Saudi Arabia seeks to recapture market share lost during reduction periods. The UAE needs revenues to fund its economic diversification plans. Russia is structurally incapable of reducing production below its minimum field-exploitation capacity.

The Iranian return and its implications

The return of Iranian oil to the global market is the most significant variable. Iran holds the world's fourth-largest proven oil reserves. Under the maximum sanctions of Trump 1.0, its production had fallen from approximately 4 million bpd to under 2 million. It has partially rebounded since, but a substantive agreement — with full sanctions removal — could add 1 to 2 million additional bpd.

The 60-day waiver valid until August 21, 2026 is a taster — a signal that normalisation is possible. Markets immediately priced in this forward-looking signal by lowering prices. That is the logic of futures markets: they anticipate not just the present but the possible.

Iran returning to the global oil market — that is a striking geopolitical paradox. A country the West considers a major threat, whose militias destabilise the entire Middle East, which supplies drones to Russia to kill Ukrainians — and here its oil exports indirectly help weaken Moscow. Oil geopolitics has no moral coherence.

Urals crude under double pressure

For Russia, the fall in global prices is amplified by a "double penalty" effect. Russian crude — notably Urals and ESPO (Eastern Siberia-Pacific Ocean) — already trades at a significant discount relative to Brent prices, due to Western sanctions and the G7 price cap of 60 USD per barrel.

When Brent falls from 115 USD to under 75 USD in a few weeks, the price Russia actually receives collapses disproportionately. According to Inbox EU/Argus Media data of June 24, 2026, Russian Urals/ESPO crude fell 20% in one week. On a national budget that depends 30–40% on oil revenues, this represents a considerable financial haemorrhage.

The war budget shrinks

The Russian war machine is expensive. Convergent estimates place Russia's 2026 military spending between 120 and 150 billion USD — over a third of the total federal budget. This machine is largely financed by hydrocarbon export revenues. When those revenues fall 20% in a week, war financing becomes problematic.

Russia has reserves — the National Wealth Fund (NWF) — but they have been massively drawn down since 2022 to offset the effects of sanctions. According to various estimates, these reserves have shrunk considerably. The combination of falling prices, sanctions, and reserve depletion creates a growing budgetary constraint on Putin's capacity to sustain his war effort's intensity.

Putin thought democracies would divide under the economic cost of sanctions. He was right in the short term. But in the medium term, it is his own revenues that are collapsing, not ours. War economics has its own laws — and they do not always favour the aggressor.

The clear winners

The fall in oil prices has clear winners. Net oil-importing countries — Europe, Japan, South Korea, China, India — see their energy bills decrease, freeing up economic resources. For European economies that suffered from the price surge since 2022, this normalisation is a welcome relief.

Ukraine benefits indirectly: falling Russian oil revenues mechanically reduce Moscow's capacity to fund its war machine. Every dollar less in Russian coffers is one less dollar available to buy ammunition, drones, and military components. This is passive economic warfare — but it produces real effects on the battlefield.

The losers beyond Russia

The losers are not limited to Russia. Gulf states — Saudi Arabia above all — see their revenues fall, complicating their ambitious economic diversification programmes. Venezuela, Iran itself (paradoxically), Algeria, Libya — all hydrocarbon producers absorb the impact of falling prices.

For oil companies that had massively invested in new extraction capacity anticipating durably high prices, the fall to 70–75 USD calls into question the profitability of some projects — notably American shale, which has a higher marginal cost. This investment slowdown could prime a price rebound in 12 to 18 months.

Oil's volatility is a permanent lesson in humility for grand strategists. Three months ago, Brent was at 115 dollars and some experts predicted an "era of expensive oil." Today it is at 70 and the same experts speak of "durable normalisation." Markets mock certainties.

Goldman Sachs revises downward

Goldman Sachs — one of the most influential financial institutions in oil market forecasting — lowered its Brent forecast for the fourth quarter of 2026 from 90 to 80 USD. This 10-dollar revision, significant, reflects integration of new data: the US-Iran deal, the third OPEC+ increase, and a slowdown in global demand.

Goldman Sachs's revision is an important signal for financial markets. It indicates that the bank does not expect a rapid price rebound — that the downward pressure is structural, not cyclical. For Russian actors hoping for a quick recovery in prices, this is bad news from an institution whose forecasts carry benchmarking authority.

The IMF: slow normalisation

The IMF, in its comments of June 25, 2026, notes that "energy and commodity prices are falling after the Iran deal but normalisation will take time." This cautious wording reflects uncertainty over the deal's durability — a 60-day deal that could be extended or abandoned depending on the evolution of Iranian nuclear negotiations.

The "slow" normalisation mentioned by the IMF suggests prices will not quickly return to pre-deal levels. The direction is clear — toward stabilisation at lower levels — but the path will be gradual and potentially volatile. For economic planners who must forecast Russia's oil revenues, this uncertainty is itself unfavourable to Moscow.

The IMF saying "slow normalisation" — that is its way of saying nobody really knows. In a context of war, fragile diplomatic deals, and multiple geopolitical tensions, economic models reach their limits. The IMF's caution is its form of institutional honesty.

What the United States obtains

The 60-day waiver on Iranian oil sanctions is not a free gift. It is part of a broader diplomatic transaction between Washington and Tehran — whose precise contours are not entirely public. What the United States obtains in return is probably linked to Iranian nuclear negotiations, Middle East de-escalation gestures, or concessions on drone deliveries to Russia.

This transaction is morally ambiguous — Iran remains a destabilising power in the Middle East and has supplied Shahed drones to Russia to bomb Ukrainian cities. But American foreign policy is pragmatic: if granting Iran a petroleum waiver reduces Russian revenues and lowers energy prices for allies, Trump will calculate that it serves American interests.

The Ukrainian calculation

For Ukraine, the US-Iran deal is a double-edged weapon. On one side, it reduces Russian revenues — a positive effect. On the other, it benefits Iran — the drone supplier that has killed thousands of Ukrainians — by allowing it to sell its oil. Zelensky is a prisoner of this logic: he benefits from Russia's financial weakening, but at the cost of the partial rehabilitation of one of his direct enemies.

This paradox illustrates the complexity of proxy warfare as Ukraine experiences it. Its allies make geopolitical decisions that partially serve its interests and partially contradict them. That is the price of a coalition-supported war — partners retain their decision-making autonomy, even when their decisions are painful for those they claim to support.

Iran supplies drones to kill Ukrainians. The US partially lifts Iranian sanctions to weaken Russia. And Ukraine must accept this equation without complaint, because it has no choice. Realpolitik has never been comfortable for its victims.

Financial pressure as a negotiating lever

The fall in Russian oil revenues creates financial pressure that could, in theory, modify Putin's strategy. A regime seeing its resources dwindle is a regime more open to diplomatic compromise — at least that is the theory behind the economic exhaustion strategy.

But this theory has limits: Putin has demonstrated Russia's ability to adapt its economy to war conditions — growing militarisation, import substitution, administered economy. Falling oil prices complicates his situation — it does not necessarily force him to negotiate. A dictator who fears military defeat more than economic crisis will not capitulate under financial pressure alone.

What WTI at 70 USD means for 2026–2027

If prices stabilise around 70–80 USD per barrel for the rest of 2026 and into 2027 — consistent with Goldman Sachs's revised forecasts — Russian oil revenues would be significantly reduced relative to the Russian federal budget's projections. Those projections were made anticipating higher prices.

A growing Russian budget deficit in this scenario would force difficult choices: cut social spending (politically risky), cut military spending (unacceptable to the war logic), or continue drawing on NWF reserves until exhaustion. Each of these scenarios has implications for the sustainability of Russia's war effort in 2027.

70 dollars a barrel is perhaps the most important number in the war in Ukraine right now. Not on the battlefields of the Donbas — in the trading rooms of London and New York. Economics is a front line Putin cannot ignore, even if he prefers to talk about missiles.

North America as a key variable in the oil balance

The fall of Brent below 75 USD cannot be analysed without considering the role of American oil production. The United States has been the world's leading oil producer since 2018, with shale oil capacities that respond more quickly to price signals than traditional producers. At 70–75 USD per barrel, some American shale projects become marginally profitable — which mechanically limits the decline.

This dynamic creates a structural asymmetry in the market: prices too low slow investment in American shales, reducing future supply and priming a price rebound in 12 to 18 months. Oil markets are cyclical by nature — the question for Russia is whether it can hold on financially during this low cycle before a potential price rebound.

What low prices mean for Ukraine's European allies

For European economies that import massively, the fall of Brent to 75 USD is an economic relief. Energy bills that had exploded since 2022 are progressively normalising. This economic improvement reinforces European governments' political capacity to maintain their support for Ukraine — it is easier to maintain sanctions when their economic costs diminish.

The double dividend for the West is therefore: fewer revenues for Russia AND less economic pain for allies. This is not a strategic coincidence — it is the result of a deliberate policy combining sanctions, energy diversification, and diplomatic management of oil markets via the US-Iran deal. Economic warfare has its own momentum logics.

The double dividend — fewer Russian revenues and less pain for Europe — is exactly the scenario Western strategists hoped for but dared not promise in 2022. Four years later, it is beginning to materialise. Strategic patience sometimes has its rewards.I remain cautious about oil forecasts. Markets surprised everyone to the upside in 2022 and to the downside in 2026. What I know with certainty: every fall in Russian revenue is good news for Ukraine. And for now, the trend is in the right direction.

A decisive economic front

This investigation confirms that the fall of oil below 75 USD is not a simple market event — it is the manifestation of a multi-front economic war where the US-Iran deal, OPEC+ decisions, Western sanctions, and market dynamics combine to exert growing financial pressure on the Russian war machine.

Brent at 77.90 USD on June 22, WTI at 70.05 USD on June 25, the 20% fall in Urals/ESPO in one week, Goldman Sachs's downward revision — figure after figure, economic reality is catching up with Putin. He can ignore moral condemnations. He can produce propaganda about military successes. But he cannot ignore his own budget statistics.

Ukraine's long game

For Zelensky and Ukraine, this oil investigation illustrates a strategic reality: the war is also being won on non-military fronts. Western support, economic sanctions, financial pressure on oil revenues — all of this contributes to the final objective. Ukrainian resistance is remarkable — but it benefits from Western economic support that takes forms even Russian strategists had not fully anticipated.

The oil price drop will not win the war on its own. But it contributes to reducing the financing capacity of Russian aggression — meaning potentially fewer missiles, fewer drones, fewer munitions over time. In a war of attrition, every constraint counts.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

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