Iran war boosts Russia's oil revenue, clouds Ukraine peace talks
Washington: Less than a week after the United States and Israel initiated coordinated strikes against Iran on Feb. 28, the expanding Middle East conflict is providing Moscow with significant strategic advantages, ranging from increased energy revenue to a diversion of Western resources away from Ukraine.
Oil Windfall for the Kremlin
The effective closure of the Strait of Hormuz, a maritime chokepoint for approximately 20% of global oil consumption, has triggered a sharp rise in energy prices. According to the Associated Press, Brent crude has climbed to over $82 per barrel, up from $72.87 on the eve of the strikes. Simultaneously, Russia’s Urals crude has surged to approximately $62 per barrel, exceeding the $59 benchmark established in Moscow’s 2026 budget. Oil and gas revenues currently comprise up to 30% of the Russian federal budget.
Bloomberg reported that Russian crude cargoes in the Arabian Sea have become an attractive alternative as Middle Eastern supplies remain trapped. Alexandra Prokopenko of the Carnegie Russia Eurasia Centre warned that if the strait remains closed, prices could hit $108 per barrel, delivering "the largest windfall to Russia" while potentially pushing European economies into recession.
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Weapons and Attention Diverted
The conflict poses an immediate logistical threat to Ukraine, specifically regarding the global supply of air defence missiles. Since the strikes began, Iran has launched hundreds of ballistic missiles at Gulf nations, most of which were countered by PAC-3 Patriot interceptors, the same system Kyiv uses against Russian strikes.
Lockheed Martin produces roughly 600 PAC-3 missiles annually, a volume the Kyiv-based Ukrainian Security and Cooperation Centre describes as insufficient to support both Ukraine and U.S. allies in the Gulf.
President Volodymyr Zelensky told Italy’s Corriere della Sera that a protracted conflict in Iran could deplete the air defence systems available to his country. Polish Foreign Minister Radosław Sikorski added, "What has already been expended definitely will not be available for transfer — or even sale — to Ukraine."
The instability has also stalled U.S.-brokered peace talks. Kremlin spokesperson Dmitry Peskov stated Moscow lacks "clarity" on when discussions might resume, particularly with Abu Dhabi’s airspace closed to civilian flights. Lithuanian President Gitanas Nausėda cautioned that "the crisis in the Middle East must not divert the international community's attention from Russia's ongoing war against Ukraine."
Moscow's Balancing Act
While the Kremlin has officially condemned the strikes on its ally, Reuters reported that Moscow has offered Tehran only diplomatic backing rather than material military aid. Some Russian hardliners are now pressuring President Vladimir Putin to abandon U.S.-mediated negotiations and escalate military operations in Ukraine, citing the Iran campaign as evidence that Washington is unreliable.
John Hardie of the Foundation for Defence of Democracies noted that while a regime change in Tehran could eventually damage Putin’s regional ambitions, "the short-term risks slant more negatively towards Ukraine."