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- Barrels on the way out: experts expect an increase in energy prices in the Russian Federation and an increase in budget revenues
Barrels on the way out: experts expect an increase in energy prices in the Russian Federation and an increase in budget revenues
The crisis in the Middle East may have a positive impact on Russia's oil and gas revenues. This is the opinion of industry experts assessing the consequences of the Gulf War. Oil prices rose by 6.29% on Monday, while gas prices rose by 34%. This is not the limit, analysts say, noting the escalation of the conflict. In the event of a reduction in the supply of raw materials from Iran to China, which accounts for 80-90% of the total exports of the Islamic Republic, the volume of exports from Russia to China in the short term may increase by 300-500 thousand barrels per day. If oil prices consolidate above $100 per barrel, then even taking into account the current discount, the Urals price of $70 will be extremely profitable for both Russian companies and the budget. The consequences of the crisis for the domestic oil and gas industry and the budget can be found in the Izvestia article.
How did the energy markets react to the conflict in the Persian Gulf
The cost of global energy resources, reacting to the conflict in the Persian Gulf, reacted with annual highs. The price of May North Sea Brent futures on the London ICE Futures Exchange increased by 6.29% to $77.46 per barrel, and April natural gas futures at the TTF hub in the Netherlands increased by 34.04% to $520.81 per 1,000 cubic meters at the close of trading.
The day before, experts expected a sharp jump in oil prices, up to $100 per barrel, noting attacks on tankers in the Strait of Hormuz. But the market showed a fairly restrained upward movement, as investors believed that so far the oil and gas infrastructure had not been severely damaged by airstrikes.
According to Stanislav Mitrakhovich, a leading expert at the National Energy Security Foundation and the Financial University, by March 2, the region's oil infrastructure was mostly "beyond the conflict."
"The episodes that the world media discussed over the weekend — attacks on individual ships, rigs and an oil refinery in Saudi Arabia — were local in nature and were not large—scale," the expert said in a conversation with Izvestia.
As for gas prices, their rapid growth is due to the fact that Qatari LNG supplied to Europe can only be transported through the Strait of Hormuz, where ship traffic is now virtually stopped, he added.
According to Dmitry Scriabin, portfolio manager of Alfa Capital Management Company, the gas market is more susceptible to risks compared to oil, given the significant impact of supplies from Qatar, the world's third largest LNG exporter with volumes of more than 120 billion cubic meters. m per year.
— Supplies from Qatar are provided through the Strait of Hormuz, which makes them extremely vulnerable to the situation in the region. Gas prices in the European hub have already reacted with an increase of more than 20%," the analyst said.
Moreover, the state-owned oil and gas company Qatar Energy announced the suspension of production of LNG and related products in connection with the Iranian air strikes.
Will Russia be able to increase its energy supplies
On March 2, attacks on the oil and gas infrastructure continued. Saudi Arabia's state-owned oil giant Aramco has suspended operations at its Ras Tannur refinery after a drone strike.
If the conflict continues and attacks on refineries continue, and traffic through the Strait of Hormuz does not become safe, the largest Middle Eastern oil exporters will be forced to stop production, says Ekaterina Kosareva, managing partner of VMT Consult.
— They will have to do this because the countries have quite limited oil storage capacity. There will simply be nowhere to put it," she noted.
In the event of an escalation of the conflict, Russia will be able to increase its energy supplies, experts say, while noting the limited capabilities of domestic oil and gas. This is due, according to analysts, to infrastructural capabilities and commitments to OPEC+.
According to Valery Andrianov, an associate professor at the Financial University under the Government of the Russian Federation, we are talking about increasing gas pumping to Turkey.
— This country received gas from Iran — about 7-10 billion cubic meters. m per year, and the likely cessation of these supplies can be offset either by an increase in LNG purchases in the United States, or by increasing gas pumping from Russia. The first option may turn out to be very costly, since the price of LNG in key markets may increase (after all, one of its leading producers and exporters, Qatar, is located in the conflict zone). Therefore, Turkey is likely to rely on Russia," the expert said.
He noted that there are technical possibilities for this. The total capacity of the Turkish Stream (31.5 billion cubic meters) and Blue Stream (16 billion cubic meters) gas pipelines m) is 47.5 billion cubic meters . m per year. In 2024-2025, they were only partially loaded (about 21-22 billion cubic meters m), which leaves a significant margin for an operational increase in pumping.
As for oil, according to Valery Andrianov, in case of supply disruptions to China and other Asia-Pacific countries, Russia may become one of the options for replacing the missing volumes. It has already noticeably increased exports to China recently amid increasing US pressure on India to encourage New Delhi to abandon purchases of Russian raw materials.
The volume of supplies from Russia to China in the short term may increase by 300-500 thousand barrels per day compared to the current level, the expert believes.
As Bloomberg previously reported, citing its sources, since the beginning of February, supplies of Russian raw materials to Chinese seaports have increased to 2 million barrels per day. In January, the figure was at the level of 1.7 million barrels, and in December — 1.4 million.
According to the expert, the situation in the Persian Gulf is leading to an explosive increase in the cost of tanker freight, which means that the transport component will eat up some of the additional revenue generated by rising global oil prices. Also, according to Valery Andrianov, Russia does not have the opportunity to increase its exports as a whole due to OPEC+ quotas.
Should we expect a reduction in the discount and an increase in budget revenues
Experts agree that the Russian budget can count on an increase in oil and gas revenues in the event of a protracted confrontation in the Middle East.
According to Dmitry Scriabin, a conflict lasting more than two months can be considered such, accompanied by serious destruction of infrastructure, as well as possible closure of straits and escalation of risks to supplies in the Red Sea. According to him, such a scenario is capable of fixing the oil price above $ 100 per barrel.
"The Russian discount is likely to decrease, but at the same time, even $70 per barrel of Urals remains an extremely profitable level for companies," the source believes.
According to NAANS-MEDIA, the discount on Russian Urals (Primorsk port) in November 2025 was $14.3 per barrel, and in December it was $27.4 for the same volume. In January 2026, the discount was already $29.8, and in February it was $30.7 per barrel.
Strait of Hormuz
According to Tamara Safonova, General Director of the Independent Analytical Agency for the Oil and Gas Sector, the discount on Russian oil may decrease in a market way if there is a shortage of raw materials on the world market as a result of the escalation of the conflict.
In addition, Russian oil shippers mostly do not use the Strait of Hormuz, with the exception of small shipments sent from Russia to the Middle East region, she added. For example, according to her, in January 2026, Egypt, Turkey, India, China, Singapore, and Georgia became the main importers of Russian oil from the ports of Primorsk, Ust-Luga, and Novorossiysk.
In addition, Bloomberg, citing its sources, reported that India intends to increase Russian oil supplies, which have reached their lowest level since 2022 over the past month. The problem with them arose due to the outbreak of hostilities in the Middle East. Half of the oil supplies to India came from Arab countries through the Strait of Hormuz, but now this route is under threat due to shelling. Russian tankers are able to reach the shores of India without any problems.
According to Ekaterina Kosareva, in these conditions, China and India will compete for Russian oil volumes, which will have a positive impact on reducing the discount. Domestic oil and gas will benefit from this competitive struggle both in reducing the discount and in increasing budget revenues. At the same time, it is still difficult to assess the scale of the effect — much will depend on the further development of events, the analyst concluded.
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