IRAN IS READY TO SUPPLY OIL TO RUSSIA
The Russian oil industry was already reaping the rewards of higher global oil prices from Iranian tensions, even before Tehran raised the stakes Wednesday by threatening to cut off oil to six European nations.
For Russian oil companies like Rosneft and Lukoil and the Russian-British joint venture TNK-BP, the international tensions that began over Iran’s nuclear development program last autumn have meant a windfall. Analysts estimate that Iran jitters have added $5 to $15 a barrel to the global price of oil, which means an extra $35 million to $105 million a day for the Russian industry. And the taxes the Russian government has received from those sales have been a political windfall for Prime Minister Vladimir V. Putin as he campaigns to return as Russia’s president. The extra money has helped further subsidize domestic energy consumption, tamping down inflation.
Rising prices, of course, are a boon for every oil producer, whether in North Dakota, the North Sea or northern Siberia.
But Russia has a particular advantage: a pipeline system that can supply Iran’s traditional customers in both Europe and Asia. Depending on which way the geopolitical winds are blowing, Russia has the ability to direct more or less of its oil either eastward or westward. Some of its oil to Europe travels by pipeline the entire way; other oil is piped to the Black and Baltic Seas and shipped from there.
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