The primary consequence of the ongoing conflict in the Middle East has been the destruction of demand in economies with limited access to capital and the depletion of oil reserves among major players, according to Alexander Isakov, Director of the Macroeconomic Research Center (CMI) at Sberbank, speaking to Vedomosti. Countries will need to replenish their reserves, hence a "tail" of oil demand is expected. "Inventories at the Cushing hub (the main oil hub in the US) have fallen to a physical minimum, and it will take years to replenish them. China has reduced imports by 5 million barrels per day and will also undergo a cycle of rebuilding corporate and sovereign reserves," notes Isakov. This will create a shortage in the oil market in the second half of 2026 and part of 2027. The Brent price is expected to remain around $75–80 over the next year and a half, the expert predicts. Isakov aptly describes oil price dynamics with the phrase "Rise like a rocket, fall like a feather." Against the backdrop of the blockade of the Strait of Hormuz and the reciprocal strikes between the US and Iran on energy infrastructure, the price of Brent oil reached $126.4 per barrel at the end of April. Prior to the escalation of the conflict, oil was priced at $72.5 per barrel. On June 26, August futures for Brent oil were trading between $72.3–75.1 per barrel, according to data from the ICE exchange. In addition to the factor of replenishing stocks in nations where oil reserves have reached their lowest levels in decades, there is also the issue of extraction infrastructure in the Middle East, points out Dmitry Kasatkin, a partner at Kasatkin Consulting. One part of the extraction process has been disrupted, while another has been put into preservation. This has also contributed to shortages and rising prices in the oil market. According to Kasatkin's estimates, the recovery process will take from three months to six months. Major concerns are linked to demand in the real sectors of the economy, claims the expert. In Asia, for example, demand has already significantly slowed. Nevertheless, by the end of the year, the average Brent price is expected to settle around $80 per barrel. According to the consensus forecast from consulting firm Kept, the average Brent oil price in 2026 is projected to rise by approximately 14% compared to the previous year, reaching $78.6 per barrel (as reported by Vedomosti on May 19). Once the Strait of Hormuz is reopened, time will be needed to repair the damaged infrastructure and restore tanker routes. Consequently, the price premium on oil is expected to persist in the market for at least another quarter after the strait is reopened, highlight analysts at Kept. The firm anticipates that the repercussions of the conflict in the Persian Gulf will continue into 2027. Oil prices are expected to stabilize closer to 2028, analysts note, forecasting a price of $69.8 per barrel in 2027 and $67.7 per barrel in 2028. The market is responding less to the balance of supply and demand and more to the resumption of transit through the Strait of Hormuz, states Sergey Tereshkin, CEO of Open Oil Market. Should the situation in the Middle East stabilize, he believes Brent prices will remain below $75 per barrel in the second half of the year. The market is already discussing the potential exit of Iraq from OPEC+, a scenario he considers quite likely given that Iraq has long been the main "violator" of the deal's terms, participating more or less formally. Finally, he adds, the possible increase in quotas from other remaining OPEC+ member countries, including Saudi Arabia and Kuwait, will also affect prices. The increase in supply will exert downward pressure on oil prices. **Other Consequences** The main losers from the conflict have been countries that lack the ability to mitigate the impact of shocks through temporary budget deficit expansion, Isakov disclosed. The most severely affected, he states, have been developing countries in Southeast Asia – importers of energy resources. Among corporations, those that did not hedge their commodity risks have suffered the most, the expert added. As the upheavals of 2025 did not lead to a significant and sustained increase in oil prices, some companies mistakenly bet that 2026 would continue to see a permanent decrease in global volatility. The cost of this error has been high – several airlines went bankrupt, Isakov reported. The current situation in the oil market has already led to rising inflation in European countries, Isakov reminds. Annual inflation in the Eurozone rose to 3% in April and 3.2% in May – significantly above the target benchmark of 2%. However, the variance between countries is substantial: inflation in Germany and France remains below average (2.9% and 2.5%, respectively), while it is primarily the smaller countries on the periphery – Romania, Bulgaria, Croatia – that are dragging the figure upwards. Energy resources played a significant role in the rise of inflation, notes the expert. For the United States, which, unlike Europe, is a net exporter of resources, the conflict has allowed for rates to remain steady. However, for the American economy, the internal investment cycle in the AI sphere is more significant, while oil represents more of a political issue, emphasized Isakov. The overheating of the US economy is influenced primarily by the massive internal investment cycle in AI, as it requires large-scale imports of equipment and materials from around the world. The structure of US imports shows polarization, the expert explains. Non-AI-related purchases are indeed declining, as should be expected with high interest rates. Nevertheless, the overall volume of imports is not falling, as expenditures on capital investments in AI are growing exponentially, asserts the Sberbank expert. For Russia, the conflict in the Middle East has become more of a disinflationary factor, Isakov observes. Its inflationary influence through trade channels is minimal. The primary partner of Russia, China, has maintained a low annual inflation rate of about 1.2%. Even monthly figures have only recently emerged from deflation into a slight positive. Against the backdrop of the growth rate of Russian inflation, this effect is virtually unnoticed, assures the Director of CMI at Sberbank. Source: Vedomosti