Russia's oil and gas sales this month are expected to almost double from $12 billion to $24 billion. The reason is the increase in commodity prices on global markets and former US President Donald Trump's decision to temporarily lift sanctions on Russian oil.
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KSE forecasts that Even if the conflict in Iran ends in the coming weeks, Russia's income from oil and gas exports may increase by 63%, reaching $218.5 billion.
During a meeting in the Kremlin on Monday, Vladimir Putin called on Russian oil and gas companies to use the extra profits responsibly.
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“Russian oil and gas companies should consider using additional revenues from rising global hydrocarbon prices to reduce their debt and pay off debts to domestic banks. This would be a mature decision,” said the Russian president, quoted by The Telegraph.
The war in Iran is changing the global oil market
Iran's blockade of the Strait of Hormuz, a key transportation route for oil from the Persian Gulf, has caused chaos in global energy markets. The price of Brent crude oil increased by 38%, reaching approximately $100. per barrel. At the same time, according to analysts, Russian oil prices have increased even more – by as much as 72%.
The US Treasury Department's decision to issue a temporary license to purchase Russian crude oil “on the water” – that is, oil that has already been loaded onto tankers – further strengthened the Kremlin's position.
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“What's happening on the market is downright crazy” — commented Boris Dodonov from KSE, adding that earlier Russia used to sell oil at steep discounts, and now those discounts have decreased significantly or disappeared altogether.
Russia benefits from the lifting of sanctions
The lifting of sanctions on Russian oil “on the water” means that Moscow can sell the raw material at market prices, which significantly increases its income. Simon Johnson, Nobel Prize winner and former chief economist of the International Monetary Fund, warned that this situation strengthens Russia.
“It just greatly increases what Russia can get per barrel by putting cash in the pockets of our enemies,” he said.
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According to data from Vortexa, a maritime transport analysis company, Since the beginning of the conflict in Iran, India has increased imports of Russian oil by 72%, which means an additional 750,000. barrels per day. In turn, discounts on Russian oil sold to China have decreased significantly, which further improves the Kremlin's financial results.
