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Russia sees an opportunity amid Persian Gulf energy crisis
The International Energy Agency is recommending the release of oil from strategic reserves to help stabilize rising oil prices, but Russia stands to benefit from an energy market in turmoil.
The cost of its heavily sanctioned oil has surged over the past two weeks, and comes as the country is grappling with growing budgetary problems.
According to data from the Russia’s Finance Ministry, its state oil and gas revenues fell by 44 per cent in February this year compared to last. However, oil markets changed drastically after Feb. 28, when the U.S. and Israel started launching strikes on Iran.
On Monday, U.S. President Donald Trump told reporters that sanctions were going to be eased on “some countries” to help with supply, but didn’t get into specifics.
Earlier, Washington allowed India to buy Russian crude that was already on tankers at sea to help with supply shortages.
Sergei Pikin, the Moscow-based director of the Energy Development Fund, said he doubts that Trump is about to lift all sanctions on Russian oil. Still, he expects that overall the energy crisis could be good for Russia’s budget.
“It is obvious that shipments from the Middle East are not so reliable anymore, that transportation risks are enormous and tomorrow could be even worse,” Pikin told CBC News.
“This really plays into Russia’s hands, because Russia continues to supply what it has to China, India and a number of other countries.”
Russia’s 2026 budget assumes that it can sell its crude for $59 US per barrel.
Reuters reported that two weeks ago it was being sold for $45 a barrel — and on Monday, when prices spiked, it was being offered at $76 a barrel.
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