Prolonged instability in the Persian Gulf is not strengthening the position of Russia’s oil industry; on the contrary, it is creating ever greater risks for exports of Russia’s Urals crude.
This is reported by Ukraine’s Foreign Intelligence Service.
The FISU notes that while at the start of the escalation in the region global oil prices surged sharply amid fears of a possible blockade of the Strait of Hormuz, the situation is now changing. Exporting countries are actively rerouting oil supplies, reducing dependence on this strategic sea lane.
According to Ukrainian intelligence, before the escalation about 3.5 million barrels of oil per day were transported via alternative routes out of a total volume of 15 million barrels. This figure has now already risen to 6.5 million barrels per day.
The most promising routes are cited as Saudi Arabia’s East–West pipeline, which connects the Abqaiq oil complex with the port of Yanbu on the Red Sea, as well as the route via the port of Fujairah in the United Arab Emirates, located on the Gulf of Oman.
By the FISU’s estimates, by 2027 the throughput capacity of these routes is planned to be increased by another 1.2 million barrels per day. This will make it possible to transport about 8 million barrels of oil a day bypassing the Strait of Hormuz.
Intelligence officials emphasize that the gradual reduction of the global market’s dependence on the situation in the Persian Gulf is weakening the factor that had been supporting high oil prices. Additional pressure on the market, according to the FISU, is being exerted by rising oil production in Venezuela, higher quotas by OPEC+ countries, and the United Arab Emirates’ exit from the cartel.
“Accordingly, Russia’s Urals crude will fall in price even faster due to the producer’s toxicity and unreliability, its sanctioned status, and the supplier’s ‘schemes’,” the Foreign Intelligence Service notes.
The FISU believes that as a result, losses to the Russian budget from oil and gas exports will continue to grow. In the view of Ukrainian intelligence, the forecast of about 2 trillion rubles in shortfalls for the Russian state budget in 2026 may turn out to be overly optimistic.