Another flare-up of the conflict in the Middle East has forced financial markets to assess potential losses: oil prices are rising, investors are revising their forecasts, and experts do not rule out a new wave of inflation. For Ukraine, this could mean not only higher oil prices but also rising costs for fuel, logistics, and, ultimately, goods in stores. Andriy Supranonok, a financier, CEO Jaspen Capital Partners, and Ukrainian investment banker, explained what scenarios international investors are considering today and whether Russia stands to gain from this.
Global Markets’ Reaction to the New Escalation in the Middle East
Markets are primarily reacting to the risk of disruptions in energy supplies. Against the backdrop of the escalating conflict, the price of Brent crude rose to approximately $86 per barrel after a jump of more than 9%. At the same time, European stock indices are falling, particularly in the transportation and tourism sectors, while energy company stocks are rising. The dollar is strengthening, and government bonds are under pressure due to fears of a new spike in inflation.
Why Oil Is the First to React to Geopolitical Crises
The oil market is extremely sensitive to the situation around the Strait of Hormuz, through which about one-fifth of the world’s oil and liquefied natural gas flows pass. Any threat to shipping is immediately factored into prices. Part of the current price increase is driven by market sentiment, but fundamental factors have also taken hold: the number of ships passing through the strait has decreased, insurance and freight costs have risen, and near-term oil deliveries have become more expensive than future ones.
Current Scenarios from Investors
The most optimistic scenario calls for a rapid de-escalation of the conflict and a return of oil prices to below $80 per barrel. The baseline scenario at this time is one of prolonged instability without a complete blockade of the Strait of Hormuz. The worst-case scenario involves a halt in tanker traffic, attacks on major oil terminals, or the simultaneous closure of the Strait of Hormuz and the Bab el-Mandeb Strait. In that case, Brent could quite quickly exceed $100 per barrel.
Will Higher Oil Prices Allow Russia to Earn More?
Rising global oil prices automatically drive up the price of Russian Urals crude as well. At the start of the current escalation, its price rose by about 50%—from $45.7 to $68.6 per barrel. At the same time, sanctions, forced discounts for buyers, the costs of maintaining the “shadow fleet,” and Ukrainian strikes on Russian oil refineries significantly limit the positive impact of this price increase on the Russian Federation’s budget.
Risks to the Global Economy
The main threat lies in the combination of slower economic growth and higher inflation. According to the IMF’s forecast, the global economy will grow by only 3% in 2026, while global inflation will stand at about 4.7%. If high oil prices persist for a long time, central banks will have to keep interest rates high for longer.
What Changes to Expect in Ukraine
First and foremost, diesel fuel, freight transportation, and logistics may become more expensive. Eventually, this will also affect the prices of food, construction materials, and other goods. As early as May, fuel inflation in Ukraine stood at 38.7% year-over-year. The NBU forecasts inflation at 9.4% and GDP growth of only 1.3% in 2026, but a prolonged rise in oil prices could worsen these expectations.
On the Impact of the Escalation on Currency Markets
In the short term, the dollar—which investors traditionally view as a safe-haven currency—will have the upper hand. Additionally, the U.S. is one of the largest producers of energy resources. The euro, by contrast, remains more vulnerable due to Europe’s heavy reliance on oil and gas imports. If the conflict deepens, the dollar will most likely continue to strengthen, while the euro will come under pressure.
Who stands to gain from higher oil prices, and who stands to lose the most
Oil producers, oilfield service companies, the defense sector, certain oil refineries, and tanker operators stand to gain. Conversely, the biggest losses may be suffered by airlines, the tourism industry, trucking companies, the chemical industry, the agricultural sector, and businesses for which logistics is one of the main cost items.
How Major International Investors Are Responding
During such periods, investors do not focus on a single asset but rather reduce their overall risk exposure. They increase their allocation to the U.S. dollar and cash, invest in energy company stocks, short-term government bonds, and inflation-hedging instruments. Gold may also see some support, although its performance depends on expectations regarding future interest rates.
Outlook for the Next Six Months
The most realistic scenario at this point appears to be one in which the conflict remains tense but does not result in a prolonged, complete blockade of the Strait of Hormuz. Under such circumstances, the price of oil could fluctuate between $75 and $95 per barrel. Inflation will remain elevated, and high interest rates will persist longer than markets had expected. A global recession is not yet the baseline forecast, but economic growth will remain weak and uneven.
Who Benefits from High Oil Prices
Among countries, the United States, Canada, Norway, and Brazil stand to benefit the most, as they are able to increase exports and are not directly dependent on the Strait of Hormuz. Among companies, ExxonMobil, Chevron, Equinor, Petrobras, and, to some extent, Saudi Aramco will feel the positive effects. In particular, U.S. exports of crude oil and petroleum products reached a record 13.6 million barrels per day as early as April.
What Ukrainian Businesses Should Expect
Ukrainian companies should monitor not only the price of Brent but also European diesel fuel prices, the dollar and euro exchange rates, and the cost of freight and transportation insurance. The first to feel the impact will be carriers, the agricultural sector, the food industry, construction, delivery services, and businesses with high fuel consumption. That is why businesses should review their fuel contracts now, build up necessary reserves, and evaluate price indexation mechanisms.
