Russia has warned that any attempts to destabilize the Middle East will lead to energy price hikes, the president has said
Oil production dependent on the Strait of Hormuz could come to a complete halt within a month, Russian President Vladimir Putin has said. He warned about the serious risks that the US and Israel’s conflict with Iran could pose to the global energy market.
Last year, around a third of the global sea-borne oil exports went through the straight, Putin said at a government meeting on the global energy markets on Monday. “That is around 14 million barrel per day and 80% of that went to the Asian and Pacific nations,” he stated, adding that “now, this route is de-facto closed.”
Traffic through the straight has reportedly dropped by 80% over the past week after the US and Israel launched their bombing campaign against Iran, prompting retaliatory strikes from Tehran. Several tankers were hit in the exchanges. The developments pushed crude above $100 and prompted expectations of emergency energy measures from the EU and other major economies.
“Oil production dependent on the strait risks fully stopping in the coming month. It is already dropping,” the president said. Restoring production could take weeks or even months, he added.
The global oil prices are already rising, Putin stated, adding that the increase amounted to over 30% in the past week alone. Disruptions in energy supplies also boost inflation and lead to industrial output decline, according to the president.
The world is about to find itself in a “new… price reality,” Putin warned, calling it “inevitable.”
Russia remains a “reliable energy supplier,” the president said, adding that it will continue to provide oil and gas for the nations that it also considers reliable partners. According to Putin, the list includes Asian nations and EU members Slovakia and Hungary.
On Monday, Hungarian Prime Minister Viktor Orban and Foreign Minister Peter Szijjarto urged Brussels to lift its ban on Russian oil and gas amid the escalating conflict in the Middle East. Earlier, US Treasury Secretary Scott Bessent announced the easing of sanctions on some Russian oil to stabilize the markets.