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But here’s the kicker: Russia is the biggest beneficiary of the Middle East war, based on Standard Chartered analysis.
Russia is eagerly capitalizing on both higher market prices and desperate customers looking for alternate sources.
The U.S. Treasury has granted special permission for Indian refiners to purchase sanctioned Russian crude, as long as it was loaded onto a tanker before 5th March. StanChart notes that these loaded, but previously uncommitted, cargoes have been rapidly bought in the spot market, saying that this short-term waiver could potentially double the volume of Russia’s oil exports to India from 1 mb/d to 2 mb/d in the near term.
Russian crude surged 10.7% to trade at $100.67 per barrel at 1.45 pm ET, with Urals crude trading at a premium to the Brent international benchmark for the first time in history, primarily due to the severe supply shock in the Middle East and shifting trade dynamics in Asia. Facing a massive shortage of Middle Eastern "medium sour" crude (a grade similar to Urals), Indian refiners have turned aggressively to Russian supplies.
This surge in demand was facilitated by the 30-day waiver from the U.S. allowing Indian refiners to receive Russian crude already on tankers to stabilize local energy security. Brent is a light, sweet crude, whereas Urals is a medium sour grade. Because Middle Eastern production of sour crude is currently offline or unreachable, refiners that require this specific feedstock are paying a premium of $4 to $5 per barrel above Brent on a delivered basis to secure Russian barrels.
The Strait of Hormuz blockade largely remains unchanged, with transit limited to mostly Iranian and Chinese vessels whose modus operandi is operating without their transponders activated, making it difficult to estimate total volumes transiting the Strait. However, commodity analysts at Standard Chartered have predicted we could see a reduction in these dark fleet transits in the event of U.S. Navy escorts, or patrols to ensure safe passage, effectively removing Iranian sea-borne supply from the market. Such a pivot would, however, still result in a net drop in supply.
https://oilprice.com/Energy/Crude-Oil/Russia-Emerges-As-The-Biggest-Winner-In-Middle-East-War.html
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Russia Emerges As The Biggest Winner In Middle East War