The armed conflict in the Middle East may lead to a shift in the demand and supply balance in the global oil and gas market, creating conditions for the redirection of Russian energy supplies. This was stated by Russian President Vladimir Putin during a meeting on the situation in the global oil and gas market on March 9. The meeting was preceded by a sharp rise in global oil and gas prices. On March 9, the price of May futures for Brent oil exceeded $115/barrel for the first time since late June 2022, reaching $118.7/barrel, according to ICE exchange data. By 20:45 Moscow time, the price adjusted to $99.5/barrel. The price of April gas futures at the TTF hub in the Netherlands exceeded $800 per 1000 cubic meters for the first time since mid-January 2023, reaching $824, before correcting to $671 per 1000 cubic meters. For comparison, on March 6, the price of oil was $92.7/barrel, and gas was $641 per 1000 cubic meters, while on February 27 (before the start of the armed conflict between the USA and Israel with Iran), it was $72.9/barrel and $390 per 1000 cubic meters, respectively. The increase in oil prices accelerated following reports of production cuts in Kuwait due to overflowing storage. Another driver was the forecast from Qatar’s energy minister, who suggested that production might stop in all countries of the Persian Gulf. The rise in gas prices accelerated after a statement by QatarEnergy on March 2 regarding the suspension of liquefied natural gas (LNG) production in Qatar. The actual halting of shipping in the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman in the Indian Ocean, has led to a spike in tanker freight rates in the Middle East to record levels. During the meeting, Putin noted that current high commodity prices are temporary. However, global logistics for supplies amidst the ongoing conflict in the Middle East will shift in favor of more lucrative and prospective markets, and the changes in demand and supply dynamics caused by the situation will lead to a new sustainable pricing reality, he emphasized. According to Putin, logistical issues on hydrocarbon transportation routes negatively affect production chains and the entire system of international economic relations. Disruption of supplies leads to economic problems, rising inflation, and decreased production of industrial goods, the President stated. He pointed out that in 2025, approximately one-third of the world's marine oil exports – 14 million barrels per day – passed through the Strait of Hormuz, with around 80% directed to Asia-Pacific region (APR) countries. Complete redirection of Middle Eastern oil supplies without using the Strait of Hormuz is impossible, the President noted. Changing logistics will require significant expenditure on infrastructure and expansion of maritime terminals, as well as entail high political risks, Putin explained. A similar situation is unfolding in the global gas market, he stated: LNG supplies from the Middle East have sharply decreased, and it is impossible to quickly compensate for the shortfall. The President drew attention to the fact that the market conditions for oil and gas globally are such that a rapid redirection of exports to markets that require increased supplies might allow Russia to establish a foothold there. These are countries with stable long-term demand and “reliable long-term relationships,” Putin noted. He reminded that Russia is a reliable supplier of energy resources and will continue to supply oil and gas to those countries that are dependable partners. This includes not only APR countries but also Eastern European states, such as Slovakia and Hungary, Putin explained. At the same time, the European Union plans to cease energy purchases by 2027, he reminded. Thus, the government has been tasked with assessing the feasibility of stopping energy resources supplies to the European market, redirecting those volumes to "more interesting directions," and establishing a presence in those markets, he emphasized. The President did not rule out that Russia could supply oil and gas to Europe if it receives signals of readiness to move away from the political context in this area. The continuing rise in oil and gas prices is largely associated with a reassessment of risks by insurance companies, which have effectively refused to cover force majeure situations during transports through the Strait of Hormuz, argues Sergey Tereshkin, CEO of Open Oil Market. Additionally, the price increase has accelerated amid attacks on oil and gas facilities, note Maxim Shaposhnikov, advisor to the head of the "Industrial Code" fund, and Igor Yushkov, an expert with the Financial University under the Government. Experts predict that in the coming days the price of Brent oil will remain around $100/barrel. In the moment, quotes could spike to $150/barrel, but these would be temporary surges, notes Shaposhnikov. Yushkov agrees with him. Subsequently, the price may drop to around $80-85/barrel, Shaposhnikov adds. Read more: VEDOMOSTI