Hormuz Crisis
Russia earns billions from commodity exports amid Strait of Hormuz closure, trade body says
Russia is earning billions in revenues from its commodity exports due to the effective closure of the Strait of Hormuz, the German-Russian Foreign Trade Chamber reported.
Russia’s profits from exporting oil, gas and fertiliser amount to more than €10 billion ($11.54 billion) a month, the chamber said. "Russia is the big winner of the new war in the Middle East," Matthias Schepp, the chamber’s chairman, told dpa.
Russia is benefiting from higher global commodity prices because it uses other export routes. All of this could "bring Russia an unexpected windfall on a historic scale", Schepp said in Moscow.
With a sustained oil price of around $100 a barrel, Russia could expect an annual increase of $71.8 billion compared with the budget plan.
The price of Brent crude for June delivery rose to more than $111 per industry-standard barrel – each of which holds 159 litres – at the start of the week. That is almost $40 more than before the war began.
The Russian budget is heavily dependent on the sale of oil and gas, with $59 per barrel currently assumed in the budget. Before the Iran war, it showed a deficit because the oil price was below the planned level.
"At the current price level, Moscow can generate around $50 billion in additional revenue per year from oil and gas alone," the chamber said.
Russia funds its war in Ukraine through exports
Russia, which is also hoping for an end to Western sanctions, is using the proceeds from commodity sales to finance its war against Ukraine.
Some in Moscow are already hoping for an oil price of $200 per barrel. According to the chamber, that would bring in $350.4 billion, $247 billion more than planned in the budget.
The chamber also calculated what the price increase would mean for Germany. Germany’s oil import bill alone could rise to more than €60 billion.
"Together with the additional gas costs, German industry faces a cost shock that will thwart the hoped-for economic recovery in 2026," said the chamber’s energy expert, Thomas Baier.
For fertiliser, Russia could achieve up to €8.9 billion in additional revenue in a medium scenario. By contrast, German farms face additional annual costs per hectare of arable land of €36 to €145, the chamber said.
The chamber said it has 750 members and is the largest foreign business association in Russia.
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