The German-Russian Chamber of Commerce says Moscow is benefiting from rising commodity prices triggered by the Strait of Hormuz crisis
Russia is generating billions in additional export revenue as disruption in the Strait of Hormuz drives up global commodity prices, according to the German-Russian Chamber of Commerce.
Higher commodity prices lift export earnings
The chamber estimates that Russia is earning more than €10 billion per month from exports of oil, gas and fertilisers, as prices surge in response to instability in the Middle East.
“The new war in the Middle East has made Russia the main beneficiary,” said Matthias Schepp, head of the chamber, in comments to the German Press Agency. He noted that Russia is able to rely on alternative export routes, allowing it to capitalise on higher global prices.
He added that the situation could generate significant additional revenues for Moscow on a historic scale.
Oil rally strengthens Russia’s fiscal outlook
With oil trading at around $100 per barrel, Russia could see an annual revenue increase of $71.8 billion compared with its budget projections, the chamber said. Brent crude for June delivery climbed above $111 per barrel at the start of the week, nearly $40 higher than before the conflict.
Russia’s budget relies heavily on oil and gas revenues and was originally based on an assumed oil price of $59 per barrel. Before tensions escalated around Iran, the budget had been under strain due to lower prices.
At current price levels, Moscow could generate roughly $50 billion in additional annual income from oil and gas alone, according to the chamber.
Additional revenues may support war effort
Russia continues to use revenues from commodity exports to finance its war in Ukraine, while also hoping for a potential easing of Western sanctions.
Some officials in Moscow are already speculating about oil prices reaching $200 per barrel. According to the chamber, such a scenario could bring total revenues to $350.4 billion - $247 billion more than currently projected in the federal budget.
Source: CNA