Russian soldiers at the frontline in Ukraine, Photo: Alexey Maishev / Sputnik
The rise in world oil prices following Israel’s strikes on Iran may unexpectedly strengthen Russia’s economic position and improve its ability to finance the war in Ukraine. This is stated in a new report by the Institute for the Study of War (ISW)
Brent crude oil prices jumped by more than 5% to $74.47 per barrel following the escalation in the Middle East.
ISW analysts point out that last year’s oil and gas revenues accounted for about 30% of the Russian budget, and therefore even a temporary rise in prices could “open an oxygen cushion” for the continuation of hostilities.
“If the price stays above $60 per barrel, Russia will be able to partially compensate for the effect of sanctions and maintain a protracted war,” ISW warns.
Previously, the Kremlin has shown concern over falling oil prices, fearing a blow to its economy. However, the new geopolitical conflict could potentially play into Moscow’s hands if the oil market remains tense.
