Middle East Conflict: The surging oil prices triggered by the Middle East conflict, involving the United States, Israel and Iran, is benefitting Russia in a big way. According to Financial Times, Russia is earning as much as $150 million in additional daily revenue from its oil sales, making it the biggest winner from the conflict in the Middle East.
Moscow earned $1.3bn-$1.9 bn windfall from taxes on oil exports so far
Moscow has so far earned an estimated $1.3bn-$1.9bn windfall from taxes on oil exports after the effective closure of the Strait of Hormuz led to rising demand for Russian crude from India and China. The US also eased its Russia sanctions and its pressure on India not to buy Russian oil, prompting a significant number of tankers to head to the Indian Ocean, the Financial Time’s report said.
The Russian government could receive $3.3bn-$4.9bn in overall additional revenues by the end of March, according to FT calculations based on industry data and several analysts’ assessments. That is assuming Russia’s Urals crude prices average around $70-$80 a barrel this month instead of remaining at a level close to the previous two months’ average of $52 a barrel, the report added.
IEA says world faces largest-ever oil supply disruption on Middle East war
The war in the Middle East is creating the biggest oil supply disruption in history, the International Energy Agency said on Thursday, a day after it agreed to release a record volume from strategic stockpiles to offset shortages and a spike in prices, according to news agency Reuters.
Global supply is expected to drop by 8 million barrels per day in March, the IEA said in its latest monthly oil market report – a volume equal to almost 8% of world demand – due to the blocking of the Strait of Hormuz, a narrow channel along the Iranian coast, since the US and Israel began airstrikes on Iran on February 28.
World Supply still expected to surge in 2026
Despite the cuts in March production, the agency still expected oil supply to rise faster than world demand, on average, in 2026.
World supply would rise by 1.1 million bpd, the IEA said, down from 2.4 million bpd expected last month.
Overall, the IEA forecasts imply that supply will be higher than demand by 2.46 million bpd in 2026, a reduction from a 3.73 million bpd surplus in last month’s report.
Efforts by Saudi Arabia and the UAE to use export routes that bypass the Strait of Hormuz were steadily ramping up, the IEA said, and were among plans that could help partially offset losses and provide a rise in global oil supplies from April through June.
(With inputs from Financial Times and Reuters)
