The escalation in the Middle East threatens to change the global oil market. Prices are already under pressure, logistics are strained, and Russia, despite sanctions, could end up as one of the biggest winners of the turmoil.
This assessment was shared by Igbal Guliyev, dean of the faculty of financial economics at MGIMO, PhD in economics, and author of the Telegram channel IG Energy, in a conversation with BeInCrypto's editor-in-chief Vladimir Arkhireysky.
$150+ per barrel: A scenario, not a limit.
According to Igbal Guliyev, the current supply-demand deficit excludes any stabilization of the market. Brent remains at $95–115 per barrel, and escalation risks, including a possible blockade of the strait, could send prices above $150, intensifying speculative growth.
OPEC+’s spare capacity is at 3.5 million barrels per day, mainly from Saudi Arabia and the United Arab Emirates. However, this is only enough for partial compensation: Without diplomatic opening of key routes, the market experiences uncontrolled price fluctuations.
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Urals is in low supply, and that benefits Russia.
Urals oil remains stable at $89–105 per barrel, where the traditional discount to Brent has nearly vanished under strong Asian demand. India has increased imports by 40%, 28 million barrels in a week, and has replaced oil types from the Middle East. Some deals are now being made at a premium.
For Russia, export revenues are increasing: Every $10 above the base price provides an additional $2.2 billion, with an annual growth potential of 20–30%. ESPO and Siberian Light types are highly sought after in China, while Arctic oil is trading above $100 per barrel due to the spread of deliveries.
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The Asian shift: China, India, and the shadow fleet.
China and India account for over 80% of Russian oil exports, respectively 50% and 40%. Deliveries are made with the so-called 'shadow fleet' from Primorsk and Ust-Luga via Suez or around Africa, while the Northern Sea Route and ESPO pipeline are becoming increasingly significant.
The export geography, according to Igbal Guliyev, can be expanded to Singapore, Turkey, and markets in Southeast Asia, if supplies from Saudi Arabia and Iraq decline.
Three scenarios for Urals.
Igbal Guliyev outlines three possible scenarios. A quick resolution and full reopening of the Strait of Hormuz could push the Urals price down to $60 if alternative supplies return to the market. Nonetheless, Igbal Guliyev predicts that prices will stay above February's lows, supported by Asian demand.
If the war in the Middle East continues, the Urals price will remain high, over $100, due to prolonged recovery of production and infrastructure in the region.
In an escalation, the lack of alternative supplies caused by disrupted logistics through the Strait of Hormuz could turn the Urals discount to Brent into a premium, with oil and gas export revenues from Russia exceeding 12 trillion rubles.
Strategy: Turn the crisis into a competitive advantage.
During volatility, also driven by Trump's statements, Igbal Guliyev believes that Russia should strengthen cooperation in OPEC+, optimize Arctic routes, and hedge currency risks, in line with the Russian energy minister's line. The goal: To turn the crisis into a competitive advantage.