Middle East Conflict's Limited Impact on Ruble, but Inflation Risks for Russia

ORENBURG, May 13. /TASS/. Changes in oil prices amid the Middle East conflict have a limited impact on the ruble’s exchange rate and the Russian economy, but the situation in the Middle East could pose inflationary risks for Russia, Adviser to Central Bank Governor Kirill Tremasov said. "The impact of oil prices on the ruble’s exchange rate and the Russian economy is limited, but global inflation could have a significant impact," he told reporters. If the conflict in the Middle East drags on, it could lead to a global surge in inflation, Tremasov said. "We’re already seeing inflation rise globally in many countries, but so far this is a fairly moderate increase in inflation rates. However, the longer uncertainty persists in the Middle East, the greater the risks associated with the overall economic situation and the risks associated with the possibility of energy prices jumping even higher," he explained. The situation is currently being contained by reserves, but as they are depleted, oil and other products may become significantly more expensive, the expert noted. "The world has entered an energy crisis driven by events in the Middle East and large oil reserves. These large reserves are currently keeping oil prices at relatively acceptable levels, even with the Strait of Hormuz closed. The longer this situation continues, the faster these reserves will be depleted. At some point, reserves will reach zero, and at some point, we could see a sharp rise in prices for energy resources followed by [prices] for everything else," he said. Fertilizer prices already rose sharply in the first wave of this crisis, leading to higher prices for agricultural products, Tremasov added. "This situation in the Middle East definitely creates long-term inflationary risks," he noted.