Source: Fortune
Summary
The war in Iran has led to a surge in global oil prices, benefiting Russia. The US has issued a 30-day waiver allowing countries to buy Russian oil without fear of sanctions, which has given Russian President Vladimir Putin new confidence. Russia has earned an estimated $7 billion from selling fossil fuels since the start of the war. The increase in oil prices has made Russia the biggest winner in the near term, according to Usha Haley, an international business professor. Despite the US Treasury Secretary’s assertion that the waiver is “narrowly tailored,” Haley believes it will be hard to enforce and may provide significant financial benefits to Russia.
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The numbers tell one story.
Russia’s oil revenues were declining, but the Iran war has given them a boost. The US waiver has allowed Russian oil to be sold at a higher price, with Urals oil benchmark trading at near parity to Brent crude. Putin is taking advantage of the situation, saying it’s “important for Russian energy companies to make use of the current moment.” Moscow’s special economic envoy, Kirill Dmitriev, has also gloated on social media, saying the US has “practically admitted the obvious” that the global energy market cannot remain stable without Russian oil.
The US’s easing of sanctions has been criticized as ineffective in solving the global oil crisis, with analysts saying it will not increase the supply of oil worldwide. Ukrainian President Volodymyr Zelenskyy has also said the move will embolden Putin, as Russia uses the money from energy sales to fund its war efforts.
Putin’s smirk is getting wider.
Author: Evan Null
