The impact of the Middle East conflict on Russia's position in the energy market

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Rambler. News on the consequences of the Gulf War for the global oil and gas market and the Russian economy:

"I consider the scenario in which it will take months to restore the normal level of oil exports from the Persian Gulf countries after the conflict ends to be quite alarming. In practice, the time frame may be significantly shorter. Firstly, by itself, production at oil and gas enterprises in the region is able to recover fairly quickly — this process usually takes 2-4 weeks. The infrastructural and geological conditions of the Persian Gulf countries make it possible to flexibly adjust production volumes depending on the situation. Secondly, the region has accumulated significant oil reserves — the storage facilities are not fully filled yet, but the volumes are significant. This means that during the period when production is gradually recovering, it will be possible to use existing reserves. This approach will help smooth out possible supply disruptions and maintain export volumes at an acceptable level. Based on these factors, I don't think the process will last for months. Rather, we are talking about a period of one to two weeks, a maximum of a month and a half. However, it is important to make a reservation here: these forecasts are valid provided that the situation does not worsen. If the conflict drags on and production levels continue to decline rather than stabilize, the recovery time may indeed increase, in which case it may take much longer to return to normal export performance."

"Russia benefits not only from rising oil and gas prices, but also from increased demand for other exported goods: fertilizers, aluminum, helium, and more. Currently, India and China are actively buying Russian barrels, including those that were stored on tankers at sea. The main increase in exports is related to the use of accumulated reserves, although some increase in production is also expected. In general, Russia benefits both from the point of view of price and from the point of view of the growth of physical supplies," Belogoryev said.

Despite the possibility of increasing the supply of liquefied natural gas, the expert pointed to the key deterrent factor — the shortage of specialized vessels. This limits the potential for rapid growth in Russian LNG exports.

The conflict over Iran may lead to a fundamental revision of energy security strategies in the world. According to the expert, this creates long-term opportunities for Russia as an alternative supplier of hydrocarbons.