Mikhail Mishustin holds strategic session on fuel and energy sector development

Mikhail Mishustin: "Protecting the domestic market remains our top priority. We must prevent the external price shock from being passed on to Russian consumers. Certain mechanisms are already in place to this end. The Fuel Damper and the moratorium on resetting it remain in effect. Temporary restrictions on the export of petrol and mineral fertilisers have been introduced."

Mikhail Mishustin's opening remarks:

Colleagues, good afternoon.

Today we will be discussing developments in the fuel and energy sector, against the backdrop of the situation in the Middle East. Recent events have created serious new challenges, affecting not only oil and refined product markets but also other key commodities.

Established shipping routes have been disrupted. One of the most important international transport corridors in the Persian Gulf has been effectively paralysed.

As a result, around 10 percent of global liquid hydrocarbon production has been taken off the market immediately. Restoring operations, infrastructure, and the movement of goods will take considerable time and significant investment.

This has already affected rates. Oil prices have risen by several tens of percent, while gas prices have risen even more sharply, almost doubling, in both Asia and Europe.

All of this has led to major imbalances in global trade. A number of countries are being forced to limit exports in order to protect their domestic markets and the interests of their consumers. Prices for petrol, diesel, and jet fuel are rising globally, as are ship charter rates. Rising oil and gas contract prices will inevitably place a significant additional burden on related industries. This will affect transport services, logistics, and electricity. Industrial costs and inflationary pressures will grow. Therefore, the consequences extend well beyond the international fuel and energy sector alone.

According to some estimates, around 40 percent of global exports of urea - an important fertiliser - have already been halted. Prices in some markets have risen by more than 50 percent.

The conflict region also accounts for up to half of global sulphur supplies. Sulphur is used in metallurgy, batteries, and the electronics industry, among others. Global helium supplies have also fallen by nearly a third. Helium is used in medical CT scanners, semiconductor manufacturing, artificial intelligence systems, and advanced scientific research. The transport of naphtha and liquefied petroleum gas from the Arab countries has been disrupted. As a result, the production of plastics, packaging, components for mechanical engineering, and electronics - and therefore the mass market - are at risk.

For our country, from a purely economic perspective, the current situation opens up new opportunities to improve the financial position of export-oriented industries and to generate additional budget revenue. We are seeing the discount on Russian oil narrow.

In times of turbulence, the global market turns back to Russia as a reliable supplier. And this applies not only to oil and gas. Our country has the potential to increase its exports of resources that are currently in short supply due to the Middle East crisis - or that may become so in the near future, including food. We must also continue to develop the fuel and energy sector and other sectors of the Russian economy, while analysing all the implications of current global developments.

Colleagues,

Protecting the domestic market remains our top priority. We must prevent the external price shock from being passed on to Russian consumers. We must ensure reliable supply and a stable balance. Certain mechanisms are already in place to this end. As we all know, the Fuel Damper and the moratorium on resetting it remain in effect. Temporary restrictions on the export of petrol and mineral fertilisers have been introduced. Other regulatory measures are also being fine-tuned.

Today we will discuss what additional steps are needed to ensure domestic market stability, protect the interests of Russian citizens, and strengthen the capabilities of our energy sector and the economy as a whole. The solutions we develop must be aimed at ensuring the sustainable operation of the industry under any scenario. I hope that today's discussions will help us make well-informed decisions.