Russia Seen Benefiting From Iran War as Oil Prices Surge

By Emmanuel Bobby

Global oil prices are climbing sharply as the United States shifts its military focus and attention to the Middle East, a development some European leaders and analysts say could benefit Russia’s economy and war effort in Ukraine.

Although Russian President Vladimir Putin recently lost an allied leader in the region, the conflict involving Iran may ultimately provide Moscow with a significant economic advantage because Russia’s economy relies heavily on energy exports.

“So far, there is only one winner in this war — Russia,” European Council President António Costa said Tuesday while addressing ambassadors in Brussels about the escalating conflict in the Middle East.

Costa said the surge in oil prices could provide Russia with additional resources to sustain its war in Ukraine.

“It gains new resources to finance its war against Ukraine as energy prices rise,” he said. “It profits from the diversion of military capabilities that could otherwise have been sent to support Ukraine. And it benefits from reduced attention to the Ukrainian front as the conflict in the Middle East takes center stage.”

Oil prices spiked over the weekend to levels not seen since the early months of Russia’s invasion of Ukraine. Although prices have eased slightly since Sunday’s peak, they remain elevated amid major disruptions in shipping through the Strait of Hormuz — one of the world’s most important oil transit routes.

The narrow waterway, bordered by Iran to the north, handles a large portion of the world’s oil supply. Shipping traffic has largely halted after Iran warned it could “set fire” to ships attempting to pass through the strait, though a limited number of vessels have continued to move through the region.

During a meeting at the Kremlin on Monday, Putin urged Russian officials and energy executives to capitalize on the situation.

He told policymakers, ministers and business leaders that it was “important for Russian energy companies to make use of the current moment.”

Putin also suggested that the European Union — which has worked in recent years to reduce its reliance on Russian energy following the invasion of Ukraine — might reconsider its stance and move toward “long-term, stable cooperation” with Moscow.

Russian media outlets have widely covered the potential economic benefits of the crisis, with headlines speculating about further increases in oil prices. One pro-government newspaper predicted that oil could climb as high as $150 per barrel.

State television commentators also mocked the potential impact on Western countries. Pro-Kremlin television host Olga Skabeyeva joked about residents of Estonia, a neighboring NATO member, potentially being forced to walk as public transportation systems run out of fuel.

Following Putin’s meeting Monday, President Donald Trump signaled that his administration might lift sanctions on “some countries” in an effort to stabilize global oil markets. He did not specify which nations he was referring to. The remarks came shortly after his first phone call with Putin since December.

Kremlin spokesperson Dmitry Peskov said Tuesday that the topic of lifting sanctions was not discussed in detail during the call.

Analysts say the extent of Russia’s economic gains will largely depend on how long the Middle East conflict continues.

If the fighting lasts only a few weeks, the financial impact could be limited. But if the war stretches on for months, Russia could see a significant boost in energy revenues, according to Petras Katinas, a research fellow focusing on climate, energy and defense at the Royal United Services Institute, a London-based think tank.

Katinas noted that Russia typically sells its oil at a discount to compensate buyers for the risk of violating U.S. sanctions. However, that discount has been shrinking as global prices climb.

“The longer the prices stay high, the more Russia will be capable of selling its crude oil in the global market with a lower discount,” Katinas said.

Higher oil revenues could provide additional funding for Russia’s military operations in Ukraine, which have placed enormous strain on the country’s finances, said James Henderson of the Oxford Institute for Energy Studies.

“No one would be surprised if military spending went up as a result of this,” Henderson said. “More money will be available, and therefore more money will be available for spending on the military. That is definitely an unfortunate consequence.”

The shift in global attention toward the Middle East also comes at a sensitive time for negotiations aimed at ending the war in Ukraine. Diplomatic efforts appear to have slowed as Washington focuses increasingly on the conflict with Iran.

Ukrainian President Volodymyr Zelenskyy recently warned that U.S. resources are being diverted away from Ukraine. He noted that air defense missiles used to protect American forces and bases in the Middle East are weapons that could otherwise have been used to defend Ukrainian cities.

However, some analysts say the change in U.S. focus could also create complications for Russia.

John Lough, head of foreign policy at the New Eurasian Strategies Centre, said Moscow had benefited from Trump’s pressure on Ukraine during negotiations.

“It’s been very helpful for the Russians to have Trump pushing Zelenskyy into the corner and trying to extract concessions from him,” Lough said. “In many ways, Trump has been a source of support for them.”

But with the administration now concentrating on the Middle East, Russia may lose some of that diplomatic leverage.

At the same time, the Iran conflict has exposed what analysts describe as Russia’s diminishing influence in the region.

Iran has been a strategic partner for Moscow and has supplied drones used by Russian forces in Ukraine. Putin on Monday offered “unwavering support” to Iran’s new supreme leader, Mojtaba Khamenei, the son of former leader Ali Khamenei, who was killed on the first day of the U.S.-Israeli operation in Iran.

According to multiple sources familiar with the situation, Russia has also been providing Iran with intelligence on the locations of U.S. forces in the Middle East, though the Kremlin has not officially confirmed any such assistance.

Despite that cooperation, analysts say Russia has largely been forced to watch events unfold without the ability to shape the outcome.

“This is another humiliation for the Russians,” Lough said. “They have been shown to be an actor that is not relevant and does not have the influence. They have had to sit back and watch this, and I’m sure that is extremely unpleasant for them.”