Oil futures dropped below $106 per barrel on Wednesday , MarketWatch reported, as negotiations between the U.S. and Iran resumed in Pakistan . The decline marks a retreat from April's $138 peak -- but the real story isn't the price. It's who's winning while the Strait of Hormuz stays mostly shut.
Russia's oil and gas revenues are set to rise 39% year-over-year in May thanks to the Iran war, though they'll still lag last year's first five months , Reuters reported. Moscow has become an unlikely beneficiary of a conflict involving its Middle East partner. Cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 million barrels per day now shut in , according to the IEA -- enough to run the entire United States for nearly two months. That supply shock has handed Russia a windfall it desperately needed after a grim start to 2026.
Can Principles Survive a Fuel Shortage?
Britain just answered that question. The UK issued an open-ended license on May 20 permitting the indefinite import of diesel fuel and aviation kerosene processed from Russian crude oil in third-party countries , according to UNITED24 Media. The move reverses an October 2023 ban and opens a route for Russian oil to enter British markets through refiners in India and Turkey.
The timing is blunt. IEA head Fatih Birol described the current oil crisis as far more severe than the energy disruptions of 1973, 1979, and 1990 combined . In mid-April, Birol warned that European stockpiles of aviation fuel would last approximately six weeks . Junior treasury minister Dan Tomlinson told the BBC that "the national interest had to come first" and Britain must "protect the security of supply for really important foundational goods in our economy, such as jet oil" .
The move follows a similar step by the United States, which on Monday extended a sanctions waiver allowing purchases of Russian seaborne oil to support energy-vulnerable countries hit by supply disruptions linked to the Iran conflict and the closure of the Strait of Hormuz , according to Marine Link. Sanctions, it turns out, are negotiable when planes can't fly.
Who Fills the Gap?
Nigeria is trying. Nigerian oil companies are plowing windfall gains from the Iran-war crude rally into near-term extraction projects, boosting the drive by Africa's top producer to double output within four years , Rigzone reported Wednesday. Production volumes from small producers could add 200,000 to 300,000 barrels per day before the end of the year , according to Wisdom Enang, a former Exxon Mobil manager in Nigeria.
Nigeria recorded its strongest oil production performance so far in 2026, as total liquid output rose to 1.66 million barrels per day in April from 1.54 million in March , data from the Nigerian Upstream Petroleum Regulatory Commission showed. Oando Energy Resources, which bought assets from Eni in 2024, plans to drill new wells to boost output 30% to 42,500 barrels per day by year-end and is bringing forward a five-year plan to double production to "capture the demand shortfall created by this conflict" , CEO Wale Tinubu told Rigzone.
The UAE is taking a different approach: infrastructure. A new West-East Pipeline project, expected to come online in 2027, will double Abu Dhabi National Oil Company's export capacity through the port of Fujairah , CNBC reported. Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed called for faster delivery of the pipeline to meet rising global energy demand during a Friday meeting.
ADNOC is running its existing Habshan-Fujairah pipeline at around 1.7 to 1.8 million barrels per day, and Fujairah is critically on the eastern shore of the UAE, accessed by the Gulf of Oman below the Strait of Hormuz , The Maritime Executive reported. Due to the war, the UAE is producing between 1.8 and 2.1 million barrels per day -- well below its pre-war output of just over 3 million. The new pipeline would let Abu Dhabi export up to 3.6 million barrels daily without touching Hormuz.
