Middle East Conflict Disrupts Energy Supply, Boosts Russia’s Oil Revenues

The conflict severely disrupted the Strait of Hormuz, a critical global shipping route. The strait was nearly shut down, cutting off close to one-fifth of the world’s oil and liquefied natural gas (LNG) supply, causing widespread concern in global energy markets.

As a result of the war-induced energy crisis, global oil prices surged sharply. According to a report by Reuters, Brent crude oil prices rose well above $100 per barrel following the late-February airstrikes on Iran.

The spike in prices has significantly benefited Russia, the world’s second-largest oil exporter. Based on preliminary production data and oil prices, Russia’s revenue from its Mineral Extraction Tax is expected to nearly double in April, reaching around 700 billion rubles (approximately $9 billion), compared to 327 billion rubles in March.

This marks one of the first clear financial gains for Russia stemming from the Iran conflict. Energy traders have described the situation as one of the most severe energy crises in recent history.

After 40 days of intense fighting, the United States, Israel, and Iran agreed to a two-week ceasefire on Wednesday. However, experts warn that even if the ceasefire holds and a peace agreement is reached, it may take several months for oil and gas production in the Middle East to return to normal levels.

Meanwhile, to facilitate maritime traffic and avoid potential underwater mines, the naval wing of Iran’s Islamic Revolutionary Guard Corps (IRGC) has announced new alternative routes through the Strait of Hormuz.