Russian President Vladimir Putin on Monday (local time) warned that the US-Israeli war on Iran has pushed global energy markets into crisis, saying oil flows linked to the Strait of Hormuz could face a complete halt in the coming weeks. He also said Russia remains open to restoring long-term energy cooperation with European nations if they signal interest in rebuilding ties.Speaking during a televised meeting with senior government officials and executives from Russia’s major oil and gas companies, Putin said that the situation in the Middle East had begun disrupting global supplies, sending oil prices sharply higher and threatening wider economic consequences.
Oil prices climbed past $100 per barrel a day earlier, reaching their highest levels since 2022. The surge follows the effective closure of the Strait of Hormuz due to the war involving Iran. The narrow waterway is responsible for transporting roughly one-fifth of the world’s oil and liquefied natural gas supplies.Putin said Moscow had long cautioned that instability in the Middle East could trigger serious disruption in global energy markets, warning that such a scenario now appeared to be unfolding.“Oil production dependent on the Strait of Hormuz risks halting completely within the next month. It has already begun to decline, and storage facilities in the region are filling with oil that cannot be transported…is extremely difficult to transport, or is extremely expensive to transport,” Putin said, as cited by Reuters.He further added that Russia, which is the world’s second-largest oil exporter and holds the biggest natural gas reserves, could benefit from the current market conditions. The Russian President further urged Moscow’s energy companies to be prepared to take advantage of the developments. Commenting on oil prices, Putin said that the spike may prove temporary. Oil and gas revenues account for about a quarter of Russia’s federal budget income.Putin also said Russia would be willing to rebuild energy ties with European countries if they signalled interest in restoring long-term cooperation.“We’re ready to work with Europeans too. But we need some signals from them that they’re ready and willing to work with us and will ensure this sustainability and stability,” Putin said.European nations have significantly reduced their dependence on Russian oil and gas since Moscow launched its war in Ukraine. Over the past four years, Western governments, including the European Union and the G7, imposed sanctions and moved to cut reliance on Russian energy supplies.The shift has been costly for Moscow. Europe had previously been one of Russia’s most profitable markets, and the loss of that demand has forced Russian producers to sell oil and gas to Asian buyers at heavy discounts.Last week, Putin instructed the Russian government to examine the possibility of diverting the remaining energy flows away from Europe ahead of the European Union’s plan to completely ban Russian fossil fuel imports.Before the Ukraine war, more than 40% of Europe’s gas imports came from Russia. By 2025, however, Russian pipeline gas and liquefied natural gas together accounted for only 13% of the European Union’s total imports.Meanwhile, the Group of Seven (G7) countries said on Monday that they were prepared to take “necessary measures” to deal with rising global oil prices, although they stopped short of announcing the release of emergency reserves.
