Has Wagner Made Russian Oil Radioactive?

Above $80, Brent crude is more than half-way to our $85 price target from when we called the bottom in mid-June. Russian seaborne exports have fallen back to their level before the invasion of Ukraine, as both China and India pull back imports, and reengineered sanctions start to bite on Russia’s “shadow fleet” of tankers. China has imposed more stringent regulations on smaller tankers in its ports. And India’s imports have fallen sharply since the Prigozhin rebellion in June, suggesting that the geopolitical risk of dealing with Russian trade has gone up. At the same time, modest US purchases to replenish the depleted Strategic Petroleum Reserve have belatedly been announced by the Biden administration. We reiterate our price target of $85, with discounted Russian exports the swing factor.