How War in the Middle East Is Boosting Russia’s Oil Profits

The escalation in the Middle East threatens to reshape the global oil market. Prices are already under pressure, logistics are strained, and Russia, despite sanctions, may emerge as one of the main beneficiaries of the turmoil.

This assessment was shared by Igbal Guliyev, Dean of the Faculty of Financial Economics at MGIMO, Doctor of Economics, and author of the Telegram channel IG Energy, in a conversation with BeInCrypto Editor-in-Chief Vladimir Arkhireysky.

$150+ per Barrel: A Scenario, Not a Ceiling

According to Igbal Guliyev, the current supply deficit rules out any market stabilization. Brent is holding at $95–115 per barrel, and escalation risks, including a potential Strait blockade, could push prices above $150, amplifying speculative growth.

OPEC+ spare capacity stands at 3.5 million barrels per day, primarily from Saudi Arabia and the UAE. This is sufficient only for partial compensation: without diplomatic unblocking of key routes, the market faces uncontrolled price dynamics.

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Urals in Short Supply and That Benefits Russia

Urals crude is holding steadily at $89–105 per barrel, with the traditional discount to Brent nearly eliminated amid frenzied Asian demand. India has increased imports by 40%, 28 million barrels in a single week, replacing Middle Eastern grades, with some deals already closing at a premium.

For Russia, export revenues are growing: every $10 above the baseline price generates an additional $2.2 billion, with annual growth potential of 20–30%. ESPO and Siberian Light grades are in high demand in China, while Arctic grades are trading above $100 per barrel due to supply diversification.

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The Asian Pivot: China, India, and the Shadow Fleet

China and India absorb more than 80% of Russian oil exports, 50% and 40% respectively. Deliveries are carried out by the so-called “shadow fleet” from Primorsk and Ust-Luga via Suez or around Africa, while the Northern Sea Route and the ESPO pipeline are playing an increasingly significant role.

The export geography, according to Igbal Guliyev, could expand beyond India and China to Singapore, Turkey, and Southeast Asian markets if supplies from Saudi Arabia and Iraq decline.

Three Scenarios for Urals

Igbal Guliyev outlines three possible scenarios. A swift resolution and full reopening of the Strait of Hormuz could bring Urals prices down to $60 as alternative supplies return to the market. Even so, Igbal Guliyev forecasts that prices will hold above February lows, supported by Asian demand.

If the war in the Middle East continues, Urals prices will remain high, above $100, due to the lengthy recovery of production and infrastructure in the region.

In the event of escalation, a shortage of alternative supplies caused by disrupted logistics through the Strait of Hormuz could flip the Urals discount to Brent into a premium, with Russia’s oil and gas revenues exceeding 12 trillion rubles.

Strategy: Turning Crisis into Competitive Advantage

Amid volatility, including that driven by Trump’s statements, Igbal Guliyev believes Russia should strengthen its coordination within OPEC+, optimize Arctic routes, and hedge price risks, in line with the position of the Russian Ministry of Energy. The goal: to turn the crisis into a competitive advantage.