The sharp rise in global oil prices following the escalation of the conflict in the Middle East has allowed Russian authorities to postpone revisions to the budget rule.
Russia had previously warned that destabilization in the Middle East would inevitably affect the global energy sector – a prediction that has now come to pass, notes Denis Astafyev, an entrepreneur, fund manager, and founder of the fintech platform SharesPro.
The Strait of Hormuz – the primary route for roughly 20% of globally traded oil – has been effectively blocked. Bloomberg estimates the loss of capacity in Persian Gulf countries at nearly 14 million barrels per day. Global markets quickly pivoted to sellers outside the conflict zone. Russian oil emerged as one of the first alternatives: Indian refineries have booked at least 30 million barrels of Russian oil, a development Astafyev highlights as particularly notable given expectations that Russian exports to India were poised to steadily decline.
The geopolitical outcome so far looks like this: Russian Urals crude is trading at a premium to the benchmark for the first time in a long while, and every $10 increase in the price per barrel brings an additional $1.1 to $1.2 billion per month to the budget. By the end of March or early April, the Russian treasury could see an extra $5 billion in revenue.
“But it’s not just about oil,” Astafyev notes. “The disruption at the strait has taken Persian Gulf aluminum off the market – prices on the London Metal Exchange have reached a four-year high of around $3,340 per metric ton. That’s a direct benefit for RUSAL. Demand for Russian fertilizers has also increased.”
In his view, Russia is not simply benefiting from higher prices in this situation; it is strengthening its position as a long-term, reliable supplier to Asia. New contractual relationships, supply chains, and customer trust are being established now. Those who see what is happening as a temporary bonus are missing the broader picture: the global energy map is being redrawn, and Russia has every reason to claim a more advantageous place on it than it held before the crisis.