US Companies Benefit Most from Strait of Hormuz Closure, Rosneft CEO Claims

The closure of the Strait of Hormuz, a critical chokepoint for global oil supply, primarily benefits American energy companies, according to Rosneft Chief Executive Igor Sechin. Speaking at the St. Petersburg International Economic Forum, Sechin argued that actions taken to blockade the strait, ostensibly aimed at Iran following alleged attacks by the US and Israel, have backfired on the global economy. He characterized these measures as an attempt to reshape global energy market regulations in favor of the United States, granting American firms non-competitive advantages and access to high-cost supplies.

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The closure of the Strait of Hormuz is an attempt to reshape global energy market regulations to benefit the United States. The measures taken to block the strait were aimed at Iran, but backfired on the entire world. The strategic risks were underestimated.

Sechin, a prominent figure in Russia's energy sector and a close ally of President Vladimir Putin, cautioned that sustained tension in the Strait of Hormuz poses significant risks. He warned that prolonged instability would undermine long-term demand for oil and could accelerate the shift towards alternative energy sources. The strategic implications of these actions, he suggested, have not been fully assessed, with the world economy bearing the brunt of the consequences.

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The main beneficiaries, of course, were American companies, which gained non-competitive advantages and the ability to secure high-cost supplies.

Looking ahead, Sechin offered a forecast for oil prices contingent on the Strait's status. He predicted that if the Strait reopens soon, oil prices could reach $95 to $96 per barrel by the end of the year, dropping to $80 to $85 within a year. By the second half of 2027, he anticipates a return to market fundamentals. The comments highlight the geopolitical complexities and economic ramifications surrounding one of the world's most crucial energy transit routes.

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Continued tension in the Strait of Hormuz for a long time undermines the long-term demand for oil. It may also trigger another surge of interest in alternative energy.