Lukoil and Rosneft.<\/a><\/p>\nEconomic growth has stagnated as massive military spending has leveled off. President Vladimir Putin has resorted to tax increases and increased borrowing from compliant domestic banks to keep state finances on an even keel in the fifth year of the war.<\/p>\n
\u201cRussia is a big winner from the war-related energy turmoil,\u201d said Simone Tagliapietra, energy expert at the Bruegel think tank in Brussels. \u201cHigher oil prices mean higher revenues for the government and therefore stronger capability to finance the war in Ukraine.\u201d<\/p>\n
Amena Bakr, head of Middle East and OPEC+ insights at data and analytics firm Kpler, writes: \u201cWith Middle East barrels facing logistical disruption, both India and China face strong incentives to deepen reliance on Russian supply.\u201d<\/p>\n
Additionally, the price of future delivery of natural gas has skyrocketed in Europe, raising questions about EU plans to put an end to imports of Russian LNG by 2027 — reviving bad memories of a 2022 energy crunch after Moscow cut off most supplies of pipeline gas due to the war.<\/p>\n
Much depends on how long the Strait of Hormuz remains closed to most ship traffic, said Alexandra Prokopenko, an expert on the Russian economy at the Carnegie Russia Eurasia Center in Berlin.<\/p>\n
A quick exit from the conflict would return Brent prices to roughly $65 per barrel and \u201ca short-lived spike would not fundamentally change\u201d Russia’s budget picture, she said. A middle scenario in which some shipping resumes and oil stabilizes at around $80 per barrel would give Russia \u201csome fiscal relief,\u201d depending on how long the higher prices last.<\/p>\n
A long-term closure with Iranian strikes damaging refiners and pipelines could send oil to $108 per barrel, accelerate inflation and push Europe to the edge of recession. \u201cThis scenario would bring the largest windfall to Russia,\u201d she said.<\/p>\n
Even several weeks of interruption in Gulf LNG could lead to calls in Europe to suspend plans to ban new Russian supply contracts after April 25, said Chris Weafer, CEO of Macro-Advisory Ltd consultancy.<\/p>\n
\u201cThe EU is under even more pressure to work with the U.S. to find a solution to the Ukraine conflict and, very likely, to consider easing the plan for a total block for Russian oil and gas imports,\u201d he said. \u201cCountries such as Hungary and Slovakia and those who have been big buyers of Russian LNG, will press for that review.\u201d<\/p>\n
In any case \u201cthe Russian federal budget will have a much better result in March,\u201d Weafer said, due to lower discounts on Russian oil and \u201cbecause there are eager buyers of Russian oil and oil products.\u201d<\/p>\n
Russia’s Deputy Prime Minister Alexander Novak said Wednesday that Russian oil was \u201cin demand\u201d and that Russia was ready to increase supplies to China and India, the Tass news agency reported.<\/p>\n
The head of Russia’s sovereign wealth fund, Kirill Dmitriev, took a dig at European Commission President Ursula von der Leyen and EU foreign policy chief Kaja Kallas, writing on X that \u201csurely the wise Ursula and Kaja have a backup LNG plan. Or maybe not.\u201d<\/p>\n
Belgium, France, the Netherlands and Spain have continued to import around 2 billion cubic meters of Russian LNG per month, and on top of that Hungary imports 2 billion cubic meters a month through the Turkstream pipeline across the Black Sea, Tagliapietra said. That would amount to 45 billion cubic meters in 2026, 15% of total gas demand for this year. <\/p>\n
It’s \u201cnot easy to replace this in case the LNG market gets tighter with continued shutdowns in Qatar,\u201d he said.<\/p>\n<\/div>\n
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