Oil prices are rising due to the war in the Middle East, but Russia is facing export challenges
18 March 18:25
Russia has not yet been able to fully capitalize on the sharp rise in global oil prices, which occurred against the backdrop of the war in the Middle East.
This is reported by Reuters , citing data from the LSEG analytical platform and sources in the energy sector, according to [Komersant].
According to the agency’s estimates, drone attacks on export infrastructure and unfavorable weather are limiting Moscow’s ability to increase physical oil shipments.
Demand for Russian oil is growing
Despite sanctions, interest in Russian oil on the global market remains strong.
In particular, a number of Asian countries—including:
- Thailand
- Indonesia
- Sri Lanka
— have expressed their willingness to consider purchasing Russian crude oil.
This became possible after the U.S. Department of the Treasury issued a temporary license allowing the purchase of Russian oil already loaded onto tankers. The license is valid from March 12 to April 11.
In addition, Chinese state-owned oil companies have resumed seeking Russian cargoes after a four-month hiatus.
Exports from major ports are declining
Despite rising demand and higher global prices, Russia has not yet managed to increase its export volumes.
According to Reuters, oil shipments from Russia’s three main western ports:
- Primorsk
- Ust-Luga
- Novorossiysk
may drop to 1.7 million barrels per day in March, which is below the planned 1.8 million barrels.
According to the International Energy Agency, exports of crude oil and petroleum products from Russia fell in February to their lowest level since the start of the full-scale war against Ukraine.
Ports under attack and storms
The situation is particularly dire at the Black Sea port of Novorossiysk.
According to industry sources, shipment volumes in March could drop by nearly half compared to February.
The reasons are regular drone attacks and difficult weather conditions.
According to Reuters, oil exports and transit through this port are running about 10 days behind schedule, and one of the drone attacks temporarily halted shipments.
At the same time, Russia is earning more
Despite problems with export infrastructure, rising global oil prices are still bringing Russia additional revenue.
Ukrainian President Volodymyr Zelenskyy stated that in the first two weeks of the war in the Middle East, Russia earned about $10 billion.
“Russia has already earned $10 billion from this war in the first two weeks of hostilities, specifically from energy prices,” Zelenskyy said during a conversation with journalists in Madrid.
According to him, Moscow is directing these funds toward financing the war.
“And it is undoubtedly investing all the money it has earned in weapons—weapons directed, at the very least, against us,” the president added.
Oil prices have skyrocketed
Amid the conflict in the Middle East, global oil prices have risen significantly.
In particular, Brent crude oil futures stood at over $101 per barrel as of the morning of March 18.
