Amid US-Israel-Iran war, Putin makes Rs 7,150 crore a day from oil: Report
Kartavya Desk Staff
Amid US-Israel Iran war, Russian President Vladimir Putin is reportedly generating at least $760 million (Rs 7,150 crore approximately) as demand for Kremlin’s oil has soared.
Citing Kyiv School of Economics Institute, The Telegraph said Putin would profit from an immense price hike and US President Donald Trump’s sanctions waivers and subsequently, the nation’s sales from oil and gas will double from about $12bn to nearly $24bn this month.
In a meeting held on economic issues two days ago, Putin was quoted as saying in the British newspaper that oil and gas companies should use their windfalls from the war in Iran to pay off their loans at home.
“Russian oil and gas companies should consider using additional revenue from rising global hydrocarbon prices to reduce their debt burden and pay off their debt to domestic banks. This would be a mature decision,” he said.
It should be noted that the closure of the Strait of Hormuz due to the ongoing war has become more lucrative for Russia as Trump decided to temporarily waive sanctions on Kremlin oil. The price of Brent crude has spiked by 38 per cent since the war in Iran began to around $100 per barrel, as Tehran halted oil flowing out of the Gulf.
Simon Johnson, the Nobel prize-winner and former IMF chief economist, told The Telegraph, “This is a disaster. It won’t affect world prices because Russian oil was reaching the market anyway.”
Johnson added: “It just increases what Russia can receive per barrel, by a lot, putting cash in the pocket of our enemies.”
Putin cautions against squandering its higher oil revenues
However, on Thursday, Putin said Russian companies and the government should take a cautious approach when deciding how to spend windfall gains from higher oil prices resulting from the war in the Middle East.
“Now that the prices of our traditional exports are rising, but the markets are in turmoil, there may be a temptation to take advantage of the situation,” Putin was quoted as saying by Reuters. Putin said this temptation could involve squandering the extra revenue, paying it out in company dividends or, in the state’s case, expanding budget spending.
“We must remain prudent. If the markets swing one way today, they could swing the other tomorrow,” he added.
“A moderate degree of conservatism and a moderately conservative approach are needed, both in the corporate sector and in public finances,” he said.
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