Russia's economy is facing further turmoil as the price of its flagship Urals crude oil plummets to its lowest value since early 2023. On Friday, Russian Urals oil prices fell to about £43 per barrel ($53), with projections suggesting they could dip to £40 ($50) if the downward trend in global oil prices continues.

This price drop comes as international oil benchmark Brent falls to £50.45 ($63.15) a barrel, its lowest since 2021, driven in part by escalating trade tensions between the US and China following the latest round of tariffs. Weaker oil prices are expected to severely impact Moscow's revenues, which are heavily reliant on oil and gas exports. These revenues play a central role in funding the country's budget, and the recent price decline could deepen the financial strain as Russia struggles to balance the books while also contending with the ongoing conflict in Ukraine.

The fall in oil prices comes at a delicate time in negotiations between Russia and the United States over a potential ceasefire in Ukraine.

The drop in revenue will likely exacerbate Russia's economic woes and add to the already tense situation, with analysts warning of more economic instability ahead.

Meanwhile, lower prices for Russian oil could create some opportunities for buyers, as the cost of shipping Ural oil from Baltic ports to India has dropped significantly.

For the first time in months, the shipping cost has fallen to £5.64 million ($7 million) per one-way shipment.

This could entice more Western shipowners to enter the market, as the price is now well below the G7-imposed price cap of £48 ($60) per barrel.

The oil price crisis comes just as Russia faces rising domestic inflation, with everyday goods, such as food and fuel, becoming increasingly expensive.

Ordinary Russians feel the impact, with the cost of basic goods, including bread, milk, and potatoes, rising dramatically.

The country now finds itself at a crossroads, as economic pain and international pressure mount, with no clear path forward.