Putin Reaps Major Gains from Iran War, But...
The war raging in Iran has unexpectedly brought significant benefits to Russia. As one of the world’s major oil and gas producers, Moscow is now reaping the rewards from the global surge in energy prices triggered by the conflict.
This situation stems from Tehran’s near-total closure of the Strait of Hormuz. The shutdown of this vital maritime route has sparked a sharp rise in global oil and gas prices, directly filling Russia’s state coffers amid pressure from Western sanctions.
Senior Fellow at the Carnegie Russia Eurasia Center, Sergey Vakulenko, revealed that the unexpected windfall income Russia is gaining from the energy price spike due to the Iran war amounts to billions of dollars.
“So far, oil prices, particularly Urals crude, have surged above $60 per barrel, providing Russia with nearly $9 billion (Rp153 trillion) per month—that’s a very substantial figure,” Vakulenko stated, as cited by CNBC International on Wednesday (1/4/2026).
Vakulenko added that the current market dynamics are forcing consumer countries to turn back to supplies from the Bear Country. Even the United States (US) is reportedly easing its pressure to stabilise the energy market.
“Even countries that previously considered reducing Russian oil purchases, such as India, are now buying more, and the United States has even issued dispensations for that,” Vakulenko said, referring to the 30-day sanctions waiver issued by the White House in early March to allow the purchase of Russian oil stuck at sea.
Russia’s Urals crude price was recorded at $115 per barrel on Wednesday. This figure has risen dramatically compared to 27 February, a day before the US and Israel launched bombardments on Iran, when the price was still hovering at $57 per barrel.
This increase in revenue provides a new lifeline for Russia’s state budget, which had been under strain. Although Russia’s budget deficit reached around $35 billion (Rp595 trillion) in the first two months of this year, the positive impact from the Iran war remains very tangible for the Kremlin.
“This windfall helps President Vladimir Putin delay plans for unpopular spending cuts in various economic sectors. What he spends on the war essentially means he’s mortgaging the country. Now, he doesn’t need to do that anymore,” Vakulenko explained.
However, not everyone views this as a sign of long-term economic strength for Russia. Retired General Richard Shirreff, former Deputy Supreme Allied Commander Europe at NATO, considers the economic gains Putin is currently enjoying as merely a mirage amid fragile fundamentals.
“This is an economy in the death zone—its position is exactly like a mountaineer above 8,000 feet where the body starts consuming itself. Russia faces long-term existential damage, but Putin is indeed benefiting economically right now,” Shirreff asserted.
On the other hand, Ukraine has expressed deep concerns about the situation. President Volodymyr Zelenskyy claimed that some international partners have even asked Kyiv to reduce attacks on Russia’s oil sector to prevent global oil prices from becoming even more volatile.
Shirreff also highlighted how the Iran war is diverting US military resources that should have been allocated to Ukraine. This becomes a double geopolitical win for Moscow in continuing its invasion in Eastern Europe.
“America has fired about four times as many Patriot missiles in the first four days of the war than they have supplied to Ukraine in four years. So, Putin wins because there will be less equipment available to give to the Ukrainian people,” Shirreff concluded.