Oil sales boom in crisis… Russia is the winner of the Iran war

Russia is reaping the biggest benefits from the surge in oil prices triggered by the war between the United States and Israel and Iran.

The Wall Street Journal (WSJ) reported on the 7th (local time) that Russian oil is emerging as a sought-after commodity in India, one of the world’s major energy-importing markets. After the war in Ukraine, U.S. sanctions left Russia struggling to find new outlets, and Russian crude often failed to attract buyers, trading at a discount to Brent. But as supplies tighten, the newspaper said there have also been cases where Russian crude has traded at a premium to Brent. That is because a blockade of the Strait of Hormuz has sharply reduced Middle Eastern crude supplies, intensifying competition among energy importers to secure barrels.

In addition, the U.S. Treasury eased sanctions to allow India to buy Russian crude in response to the jump in global oil prices. U.S. Treasury Secretary Scott Bessent also hinted at further easing. Nabin Das, a senior analyst at oil data provider Kpler, said, “The longer the conflict drags on, the more the world will increase its dependence on Russian crude and refined products.”

Commenting on the shift, Russian President Vladimir Putin said on the 4th that “sanctions and other measures imposed by the West on Russian oil are stoking higher prices,” adding that “new markets are now opening.” The Russian government also confirmed that demand for Russian energy products is rising due to the Iran war. Some observers say that if the Iran war becomes prolonged, Europe, too, may have little choice but to change its policy of halting imports of Russian oil and other products.

Lee Hye-in, hey@hankyung.com