Hormuz consequences for Russia and Germany between model and reality

Russia's gross oil revenues in mid-May 2026 were in the range of the 100-dollar scenario of the model calculation of the German-Russian Chamber of Foreign Trade in March. Urals was trading at a fiscal average of 94.87 US dollars per barrel in May, according to Bloomberg - 61% above the budget figure of 59 US dollars. Urals at 13-year high Since the start of the war on February 28, Brent has risen from USD 77 to USD 126 on April 30 and was trading at USD 108 on May 20. The increase compared to the pre-war level of around USD 72 at the beginning of December 2025 is 49%, as data from Trading Economics shows. Russian Urals oil rose from 45 US dollars at the end of February to 70 in March and 110 in April. In May, the Russian main grade was quoted at USD 94.87 - the highest level since March 2013. The discount of Russian oil compared to North Sea Brent is also shrinking. At the beginning of 2026, the discount was still USD 31 per barrel, driven by US sanctions against Indian buyers of Russian oil. With the elimination of Iranian competition and the 30-day sanctions waiver issued by the US Treasury Department on March 8, the discount fell to between USD 16 and USD 22. In May, it stands at around 20 US dollars. Tanker traffic through the Strait of Hormuz has effectively come to a standstill. According to shipping data from industry analysts Kpler, evaluated by the US Naval Institute, only 14 to 15 tankers passed through the strait every day in the first half of May. Before the war began, around 3,000 tankers passed through the Persian Gulf every month. In April 2026, there were 191 - a decrease of 94%. The Asia-Pacific region receives 46% of its oil imports from the Persian Gulf and is looking for alternatives. Reality check of the chamber's March forecast The model calculation of the German-Russian Chamber of Foreign Trade from March 11, 2026, which was quoted by numerous newspapers and television stations, had estimated Russia's annual gross revenues from crude oil exports in six Urals price scenarios: 87.6 billion US dollars at 50 US dollars per barrel, 131.4 billion at 75 US dollars, 175.2 billion at 100 US dollars, 227.8 billion at 130 US dollars, 262.8 billion at 150 US dollars and 350.4 billion in the extreme scenario of 200 US dollars. The budget plan value was USD 59 per barrel of Russian oil, and the April tax average level of USD 94.87 is just below the USD 100 scenario. Extrapolated on an annualized basis, gross export revenues amount to around 166 billion US dollars - around 63 billion US dollars more than in the budget plan. Before the war began, Urals was trading at between 41 and 45 US dollars and revenues were below the planned figure. Within ten weeks, this has turned into a double-digit billion surplus.Russian analysts were closer to the target with their conservative expectations than Western commentators. Sergei Kaufman from the Moscow-based online broker Finam expected the discount to fall below 17 euros per barrel - which is what happened. His colleague Nikolay Dudchenko expected additional revenues of up to 775 billion roubles, around 9 billion euros, based on an annual average of 51.7 to 55.9 euros for the Urals. Alexander Frolov from the Institute for National Energy saw oil and gas revenues rising by 30% to 50% from March. In fact, the April figure fell short of the upper limit, as dumping mechanism payments and the strength of the rouble siphoned off a large part of the price premium. Budget: May jump compared to previous year Russia's federal oil and gas revenues from taxes amounted to 855.6 billion roubles, 10.5 billion euros, in April. This was 40% more than in March, according to the Russian Ministry of Finance. For May 2026, a Reuters projection calculated a plus of 39% compared to May 2025. Russia's Gazprombank estimates the special income from the Iran war alone in May at 400 to 500 billion roubles, 5-6 billion euros, based on a Urals price of around 100 US dollars. Over the first four months of 2026, oil and gas revenues amounted to 2.3 trillion roubles, around 28 billion euros, 38.3% below the same period of the previous year. The low prices in January and February and the strong rouble are depressing the annual average. Russian energy analyst Kirill Rodionov from the Moscow Center for Economic and Political Reforms told the business newspaper RBC in March that the average price of USD 40 in the previous months was "critical for the budget". This critical phase ended with the Israeli-American attack on Iran on February 28. EU Council President António Costa declared in Brussels as early as mid-March: Russia is gaining new resources to finance its military. James Henderson from the Oxford Institute for Energy Studies told the US broadcaster NBC that it would "surprise no one if Russian military spending increased as a result." India and China compensate for Iran shortfall The biggest shift in trade flows since the start of the military strikes against Iran and the closure of the Strait of Hormuz concerns India. According to the Washington-based think tank  Center for Strategic and International Studies (CSIS)  Russia supplied exactly 2.14  million barrels per day to India in March 2026  - 47  % of all Indian oil imports. In December 2025, the figure was 1.36 million barrels and a share of just 21.4%. Russia's market share in India has therefore more than doubled within three months. In April, the volume fell slightly to around 2.0 million barrels, while the market share remained at around 45%. An Indian government representative told the Reuters news agency on May 18 that the country would continue to purchase Russian oil regardless of US sanctions. China is also buying more Russian oil because Iranian crude oil has disappeared from the market since the American blockade. Iranian crude oil exports to China fell from 1.7 million barrels per day in the third quarter of 2025 to 1.4 million in February 2026, then to 0.3 million in March, then below 0.2 million in April and to almost zero in May, according to the US State Department and market information provider Vortexa. The Iranian shortfall is roughly equivalent to the increase in Russian deliveries to India. Russian exports on the rise Russia's oil exports via the ports of Primorsk, Ust-Luga and Novorossiysk rose by around 150,000 barrels per day in the first half of May, around 9% compared to April, to between 2.35 and 2.4 million barrels per day, according to Reuters. According to British analysts, this is due to ongoing drone attacks on Russian refineries, which are forcing Moscow to export more crude oil instead of processed products, and market participants warn that the free capacity in the pipeline network of state operator Transneft is approaching its upper limit. In the first ten days of May, the port of Novorossiysk processed around 1 million tons of backlogged April volume. A drone attack had briefly halted tanker loading there in April. The loading rates at the three ports are currently 1.1 million (Primorsk), 0.7 million (Novorossiysk) and 0.6 million barrels per day (Ust-Luga). Fertilizer: Liebig's law strikes According to the Washington-based International Food Policy Research Institute (IFPRI), a research organization of the World Bank Group, the Persian Gulf supplies 36% of globally traded urea, 29% of anhydrous ammonia, 26% of diammonium phosphate and 13% of monoammonium phosphate. The closure of the Strait of Hormuz thus effectively blocks half of the global nitrogen and phosphate fertilizer flows.nbsp;In his article for the industry portal OilPrice the American energy publicist Kurt Cobb recalls the mineral law of the German chemist Justus von Liebig (1803-1873): If an essential nutrient is missing, the deficiency cannot be compensated for by more of others. According to Reuters, Argentinian wheat farmers are already reducing their use of urea, while Egyptian farmers are halving their sown area. A survey by the American Farm Bureau Federation found that 70% of US farmers will not be able to meet their fertilizer needs in 2026.Russia is the world's largest fertilizer exporter with exports of 45 million tons of fertilizer and export revenues of USD 15 billion in 2025. The model calculation of the German-Russian Chamber of Commerce Abroad from March 30, 2026 had calculated additional revenues of 6.4 to 10.2 billion US dollars compared to 2025 for the medium price scenarios. Helium: Russia as a potential emergency supplier The Iranian attack on Qatar's Ras-Laffan gas plant at the end of March 2026 threw the global helium market off balance. Around a third of the world's supply was lost overnight. Qatar had previously accounted for 63 million cubic meters, a third of global production of 190 million cubic meters, according to the US Geological Survey (USGS). An analysis by the German-Russian Chamber of Commerce Abroad from April 14, 2026 sheds light on Russia's role in this market.Russia has been the third largest helium producer since 2024. Production grew from 4.5 million cubic meters in 2020 to 18 million cubic meters in 2025 - a five-fold increase in five years. The capacity of Gazprom's Amur gas processing plant is theoretically 60 million cubic meters, the former Qatar level. In reality, the plant produces 18 million cubic meters, far below its potential. The German plant manufacturer Linde left Russia in June 2022, Gazprom is continuing the ramp-up without a Western licensor.Europe consumes 40 million cubic meters of helium annually and produces only 3 million - mainly in Poland. The French industrial gases group Air Liquide declared force majeure on March 17, 2026 and announced that it would only be able to supply 50% of the usual volumes. Spot prices in Europe rose by 30% to 50% above the global level. Major US bank Bank of America estimates the global market will be 15% short of demand well into 2027, even with a quick ceasefire. Russia's Amur plant remains the only source that can produce more in the short term  Steingart's five Hormuz cost theses In his Pioneer Morning Briefing, German journalist and publisher Gabor Steingart summarized the global costs of the crisis in five points. Firstly, it is hitting US private households: According to Brown University's Watson School of International and Public Affairs, Americans have spent more than $42 billion extra on gasoline and diesel since the war began: $320 per household. Gas prices per gallon, 3.8 liters, have risen by over 50% since Trump took office.Secondly, energy costs are a burden on companies. A Reuters analysis of listed companies in the USA, Europe and Asia puts the cost of the crisis to date at 25 billion US dollars. According to UBS strategist Gerry Fowler, consumer-related sectors such as automotive, telecommunications and household goods have to factor in profit revisions of more than 5%. Before the war, the International Monetary Fund (IMF) had forecast global growth of 3.4% in 2026. In the worst-case scenario, the IMF now expects 2% - a drop of 1.4 percentage points. With a nominal global GDP of 125 trillion. US dollars, this corresponds to 1.75 trillion US dollars in lost economic output. US dollars in lost economic output. Steingart speaks of "the biggest brake on growth outside of times of world war and pandemic". Fourthly, inflation is rising. In the USA, the inflation rate is already at 3.8%, in Europe at 3%. In the worst-case scenario, the IMF expects overall global inflation to reach 5.8% in 2026, compared to 3.9% in the pre-war forecast.fifthly, interest rates are rising. The average ten-year interest rate of the G7 countries has climbed from 3.2% to just under 4% since the start of the war, while the thirty-year interest rate has risen to 4.6%. With a debt burden of 65.6 trillion. With a debt burden of USD 65.6 trillion, the increase of 80 basis points equates to around USD 520 billion in additional interest pressure per year as soon as the old bonds expire.Steingart comments pointedly: "The man in the White House has not only disappointed his voters, he has betrayed them. The bill, that is the bitter news for Europe, will be delivered worldwide. The German government should consider suing the USA for damages." Hormuz effect: German economic recovery fails According to the International Energy Agency (IEA), Germany imports around 1.8 million barrels of crude oil a day. At an oil price of 100 US dollars, the annual import bill rises to 60.4 billion euros - a doubling compared to the 50 dollar level before the start of the war. At 130 US dollars, it would be 78.6 billion euros. The total federal budget for 2026 comprises 480 billion euros in expenditure. The impact is already visible at filling stations. The ADAC average price for diesel climbed from 27 February 2026 (1.38 euros per liter) to 1.97 euros in mid-May - an increase of 0.59 euros or 43%. E10 rose from €1.66 to €2.02, an increase of €0.36. Peak prices in mid-April were at 2.50 euros per liter of diesel.Sebastian Dullien, Scientific Director of the Düsseldorf Institute for Macroeconomics and Economic Research (IMK), had already concluded in March that the recovery of the German economy hoped for in 2026 was "definitely over with the war." This article was created for the German-Russian Chamber of Commerce Abroad. The post Hormuz consequences for Russia and Germany between model and reality appeared first on ostwirtschaft.de.