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Russia to Use Dubai Benchmark in Indian Oil Deal

An oil tanker moored in the Russian Sheschares complex (AP)
An oil tanker moored in the Russian Sheschares complex (AP)
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Russia to Use Dubai Benchmark in Indian Oil Deal

An oil tanker moored in the Russian Sheschares complex (AP)
An oil tanker moored in the Russian Sheschares complex (AP)

Russia's largest oil producer Rosneft and India's top refiner Indian Oil Corp agreed to use the Dubai oil price benchmark in their latest deal to deliver Russian oil to India, three sources familiar with the matter said.

The decision by the two state-controlled companies to abandon the Europe-dominated Brent benchmark is part of a shift of Russia's oil sales towards Asia after Europe shunned Russian oil following Russia's invasion of Ukraine more than a year ago.

The two benchmarks are dollar-denominated and set by S&P Platts for energy data. European oil majors and traders mainly use a unit of US-based S&P Global, but Brent, whereas Dubai is heavily influenced by Asian and Middle Eastern oil trading.

Rosneft's CEO, Igor Sechin, said in February that the price of Russian oil would be determined outside of Europe as Asia has emerged as the largest buyer of Russian crude since the West imposed progressively tighter sanctions on the export.

Under the new deal, announced on March 29, Rosneft will nearly double oil sales to Indian Oil Corp, two sources told Reuters.

Russian Deputy Prime Minister Alexander Novak said Tuesday that Russian oil sales to India jumped 22-fold last year, but he did not specify the volume sold.

The two sources said Rosneft would sell up to 1.5 million tons (11 million barrels) each month, including some optional quantities, to IOC in the new fiscal year from April 1.

The larger volumes and change in Russian oil pricing highlight closer ties between Moscow and India, which has now become the largest buyer of seaborne crude from Russia.

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US Involvement in Iran-Israel Conflict Raises Fears of Strait of Hormuz Closure

A general view of the Strait of Hormuz (Reuters)
A general view of the Strait of Hormuz (Reuters)
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US Involvement in Iran-Israel Conflict Raises Fears of Strait of Hormuz Closure

A general view of the Strait of Hormuz (Reuters)
A general view of the Strait of Hormuz (Reuters)

As the conflict between Iran and Israel intensifies, experts warn that direct US involvement could trigger a dangerous escalation, most notably, the closure of the Strait of Hormuz, a critical global energy chokepoint.

If Iran were to follow through on this long-standing threat, the consequences would be severe, cutting off roughly 20% of the world’s oil exports and 30% of global natural gas shipments.

Russian strategic analyst Andrey Ontikov told Asharq Al-Awsat that fears remain real and growing, particularly if the war expands.

If the United States is drawn into the war alongside Israel, the likelihood of Iran moving to close the Strait of Hormuz becomes the most serious and effective threat, he said.

Ontikov explained that such a move would paralyze global energy flows from the Gulf, sending oil and gas prices soaring and inflicting major economic damage on both exporting and importing nations.

The resulting disruption would directly affect international shipping, raise transport and insurance costs, and cause energy prices to spike, further straining already fragile global supply chains, he added.

He also warned that broader geopolitical implications are at stake. A regional war involving the Strait of Hormuz could jeopardize key trade corridors, including China’s Belt and Road Initiative and Russia’s North-South transport corridor.

That would have a direct economic impact on both Beijing and Moscow, forcing countries to look urgently for alternative trade routes, Ontikov said.

Oil prices are already rising, though Ontikov believes that if tensions ease, the global economic impact could be contained. However, a prolonged or widened war would paint a far more troubling picture.

Saudi economic expert Dr. Ibrahim Alomar, head of Sharah Consulting, echoed these concerns.

“If the conflict stays limited, the effects may include a temporary $10–$20 increase in oil prices and limited disruption to financial and shipping markets,” he said. “But a broader war could push oil prices above $120, causing inflation and a sharp global economic slowdown.”

Alomar warned that in the worst-case scenario - where the Strait of Hormuz is fully closed - oil prices could skyrocket past $200, triggering hyperinflation, severe recession, and a collapse in global financial markets.

“Such a scenario could ultimately reshape the global economic system, depending on who emerges least damaged from the crisis,” he concluded.