Oil producers outside Middle East conflict zone gain from market shock

Tuesday 03 - 10:47

By: Dakir Madiha

Oil producers outside Middle East conflict zone gain from market shock

The surge in oil prices following US and Israeli strikes on Iran is creating fresh revenue opportunities for crude exporters far from the fighting. As Brent crude jumped as much as 13 percent to above 82 dollars a barrel after the attacks, countries such as Russia, Brazil, Mexico, Colombia, and Guyana are emerging as key suppliers for importers seeking stable flows away from the Gulf and the Strait of Hormuz chokepoint. Energy analysts say higher prices and a potential loss of Iranian and Gulf barrels could reinforce the fiscal position of several producers, even as the duration and intensity of the conflict remain highly uncertain.

Russian energy companies were among the early winners. At the opening of the Moscow Exchange on 2 March, shares in Russia’s largest oil groups rallied sharply, with Rosneft, Lukoil, Gazprom Neft, Novatek, and Tatneft all posting strong gains, according to data cited by regional media. The move reflects expectations that Russia will benefit from higher prices and a shift in demand, particularly from Asian buyers that rely heavily on Gulf supplies. With Iran announcing the suspension of trade through the Strait of Hormuz, a route that carries a large share of world oil flows, India and China face strong incentives to deepen purchases of Russian crude, according to energy data firm Kpler. Analysts note that India, which holds limited strategic reserves, is already seeking additional Russian barrels to bolster its short‑term supply security.

Latin American exporters are also positioned to gain. Colombia, which pumped around 750,000 barrels per day in 2025, stands to earn more from each barrel sold as prices rise, reinforcing its status as a Western Hemisphere supplier outside the conflict zone. Reporting from Latin American outlets indicates that Brazil, Mexico, Colombia, and Guyana could all see higher export revenues and stronger public finances if elevated prices persist. Colombia’s state‑controlled producer Ecopetrol has recently deployed a dedicated export vessel for shipments to the United States, underscoring its drive to present itself as a reliable supplier to its main market.

Despite the immediate windfall, analysts warn that the outlook is fragile. OPEC plus agreed on 1 March to raise output by 206,000 barrels per day from April, in a move framed as a modest unwinding of earlier voluntary cuts. Research firms such as Wood Mackenzie have suggested the increase could prove irrelevant if flows through the Strait of Hormuz remain heavily disrupted, given the scale of potential losses from Iranian and Gulf exports. Dan Marks, a research fellow at the Royal United Services Institute, said that higher oil income alone is unlikely to transform Russia’s strategic position, even if it improves short‑term budget balances. The key variable for producers hoping to benefit, he added, is how long the conflict lasts, with President Donald Trump indicating it could continue for about four weeks.