The ongoing conflict in the Middle East is creating major disruptions in global oil markets. Iran’s control over the Strait of Hormuz, a crucial route for the world’s oil shipments, has slowed exports and pushed countries to look for alternative supplies. Russia is stepping in to fill the gap, benefiting from rising demand and higher oil prices, which is driving a significant boost in its revenues.
Iran Crisis Sends Russia’s Oil Revenues Soaring
The conflict between the US, Israel, and Iran is sending shockwaves through global oil markets, giving Russia an unexpected boost. As the war enters its second week, Iran’s control over the Strait of Hormuz—a key route for global oil shipments—has disrupted exports, creating a gap that Russia is stepping in to fill.
With demand for Russian crude surging, Moscow is seeing a sharp rise in revenue. Industry estimates suggest Russia is earning an extra $150 million per day in budget revenues from oil sales during the crisis. In just the first 12 days, the country has gained an additional $1.3 billion to $1.9 billion from taxes on exports. If current prices hold, revenues could rise by $3.3 billion–$5 billion by month’s end.
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The main factor behind this windfall is the rising price of Russia’s Urals crude, which could now average $70–$80 a barrel, up from about $52 recently. The spike is directly linked to disruptions in the Strait of Hormuz, as nations scramble for alternative oil sources.
How the Strait of Hormuz Disruption is Boosting Russian Oil
The Strait of Hormuz is a narrow waterway between Iran and Oman, through which around 20% of the world’s daily oil supply normally passes. The current conflict has sharply reduced tanker traffic, affecting exports from major Gulf countries.
The International Energy Agency estimates that global oil supply in March could drop by around eight million barrels per day, possibly the largest disruption ever recorded. This shortage has caused oil prices to spike, with Brent crude nearing $100 a barrel.
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Major Asian economies, needing alternative supplies, are now turning to Russia, one of the world’s largest oil producers. Before this conflict, Russian oil often sold at a discount due to Western sanctions and political pressure. But the discount has narrowed. Russian crude is now selling $20–$30 a barrel higher than its average over the past three months. In some deals with India, it even costs around $5 more than Brent crude, reversing previous discounts.
This price increase has a direct impact on Russia’s finances. Every $10 rise in the average monthly oil price adds roughly $2.8 billion to Russian exporters’ revenue. About $1.63 billion of this goes directly to the government through taxes, helping Moscow strengthen its budget in the middle of challenging economic conditions.
India and China Are Leading the Surge in Russian Oil Purchases
The disruption in Gulf oil exports has pushed big Asian importers to seek other suppliers. India and China, already the largest buyers of Russian oil after Western sanctions in 2022, have ramped up purchases during the crisis.
Shipping data shows that imports from Russia by both countries rose approximately 22% in the week following the strikes on Iran, compared to February averages. India alone is now importing roughly 1.5 million barrels of Russian oil per day, a 50% increase from early February. Large volumes of oil are moving across the Indian Ocean to Indian ports, according to shipping analytics firms.
The surge in prices comes at a crucial moment for Moscow. Earlier this year, Russia’s energy revenues had fallen nearly 50% compared with the previous year, pushing the budget deficit close to its full-year target. Exports were also weakening, with shipments dropping 11.4% in February to 6.6 million barrels a day—the lowest level since the start of the war in Ukraine.
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The current spike in Russian oil prices provides a temporary but significant boost. It strengthens government revenues, helps balance the budget, and shows how global conflicts can unexpectedly shift economic power.
Russia is also producing about 300,000 barrels per day below its Opec+ quota, which means it has room to increase output if conditions remain favorable. However, analysts warn that this boost depends entirely on how long the disruption at the Strait of Hormuz lasts.