RUSSIA COULD GET WINDFALL FROM IRAN WAR OIL PRICES
Rising profits would help pay for continued fighting in Ukraine.
By DAVID MCHUGH The Associated Press
FRANKFURT, GERMANY
The Iran war's disruption of Middle East oil and gas supplies and soaring prices are strengthening Russia's ability to profit from its energy exports, a pillar of the Kremlin's budget and a key to paying for its own war in Ukraine.
Prices for Russia's oil exports have risen from under $40 per barrel as recently as December to about $62 per barrel first on fears of war and then due to interruption of almost all tanker traffic through the Strait of Hormuz, the conduit for some 20% of the world's oil consumption.
Russian oil still trades at a considerable discount to international benchmark Brent crude, which has risen above $82 from the closing price of $72.87 on Friday, the eve of the attack on Iran by the U.S. and Israel. However, Russian crude is now above the bench mark of $59 per barrel that was assumed in the Russian Finance Ministry's budget plan for 2026. Oil and gas tax rev enues account for up to 30% of the Russian federal budget.
Additionally, the halt in production of ship-borne liquefied natural gas, or LNG, by major supplier Qatar will sharply increase global com-petition for available cargoes - including those from Russia.
Russia had seen state oil and gas revenue fall to a four year low of 393 billion rubles ($5 billion) in January and the budget shortfall of 1.7 trillion rubles ($21.8 billion) for that month was the biggest on record, according to Finance Ministry figures.
The lower revenue was due to weaker global prices and to deep discounts fueled by U.S. and European Union hindrance of Russia's "shadow fleet" of tankers with obscure ownership used sell oil to its biggest customers, China and India, in defiance of a Western imposed price cap and sanc tions on Russia's two biggest oil companies, Lukoil and Rosneft.
Economic growth has stagnated as massive mili tary spend…
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