Middle east crisis: Russia emerges as the main beneficiary in Oil Markets—How will the EU React?

Russia seems to be the main beneficiary amid tensions involving the United States, Israel, and Middle Eastern countries. Oil prices have surged 27% compared to the period before the escalation, and a temporary easing of sanctions has boosted both the value and volume of Russian crude exports, analysts pointed out.

“Russia could gain significant revenue from higher oil prices, particularly because the United States has relaxed restrictions on the sale of Russian crude to India,” said Saul Kavonic, head of energy research at MST Marquee.

Despite European sanctions following its invasion of Ukraine in 2022, Russia remains one of the world’s largest oil exporters, with rising prices translating directly into higher state revenues.

Henning Gloystein noted that Russia has already reaped substantial benefits, thanks to a temporary waiver granted by Washington allowing India to continue purchasing Russian crude. In addition, he claimed that these cargoes were sold at around $90 per barrel, a significant increase in both price and sales volume compared with the roughly $50 per barrel before the Iran war.

The question now is how Europe will respond.

The EU’s oil and gas supply coordination bodies will meet on Thursday to review developments in the Middle East crisis after tensions with Iran pushed oil prices above $100 per barrel.

According to Reuters, these groups will evaluate the impact of the conflict on the energy sector and review the latest estimates from member states regarding oil supplies.

EU countries are required to maintain strategic reserves sufficient for 90 days of consumption. Representatives from member state governments will attend the meetings to monitor the security of oil and gas supplies and coordinate measures in the event of a crisis.

Benedetta Zimone