Middle East Conflict Drives Oil Prices Higher, Boosting Russia's Economy

Oil and gas prices have hit new records in response to the escalating conflict in the Middle East, and it's good news for Russia's economy.

The price of Russian Urals crude oil surpassed $100 per barrel on September 10 and has been trading at around $114 as of September 25, which is higher than its previous peak this year. Gas prices have also risen significantly, now trading between $850-$900, up from $700 just a month ago.

This surge in oil and gas prices plays into Russia's hands, allowing it to increase foreign currency revenues to its budget. However, according to BEROC expert Nastassia Luzgina, the implementation of contracts at the current price will occur with a delay of one and a half to two months.

Russia is also severely affected by damage to its oil and gas infrastructure due to strikes on oil refineries, which forces it to purchase petroleum products itself at high prices from other countries. The conflict in the Middle East rather plays into Russia's hands because regardless of the situation in Iran, Ukraine would still strike Russian oil refineries.

The current price of Urals oil is almost double the level set in the Russian budget for 2026 - $59 per barrel. The average price for Russian oil since the beginning of September is $81 per barrel.