Bloomberg: Russian economy surges amid Strait of Hormuz closure

The Russian economy has strengthened significantly due to rising oil sales driven by military actions in Iran, further fueled by disruptions in the Strait of Hormuz that tightened global supply and boosted export revenues.

The boost in revenues is also supported by gas, grain, aluminium, and fertiliser exports, according to Bloomberg.

Analysts noted that a week before US and Israeli strikes on Iran, Russia had considered lowering its economic growth forecast and anticipating Urals crude prices to fall to $45–50 per barrel. By the end of last week, the average price of Urals crude at Russian western ports reached $93.4 per barrel.

Experts estimate that Russian oil exports could increase by $40 billion if high prices persist through the end of the year. If hostilities cease and the Strait of Hormuz reopens, the gain would be around $10 billion.

Tehran’s control of the Strait has also affected aluminium, LNG, and certain fertilisers. Since the start of the conflict, aluminium prices have risen 12% and urea nearly 75%. Sources told Bloomberg that Rusal, which accounts for over 5% of global aluminium production, is receiving orders from the US and Europe.

On March 13, the US temporarily eased restrictions on Russian oil operations by issuing a license valid until April 11. The license does not apply to transactions involving Iran, nor participants linked to Cuba, North Korea, Crimea, or new Russian territories. Following the relaxation, purchases of Russian oil have surged in India and other Asian countries.

By Jeyhun Aghazada