Iran’s blockade of Strait of Hormuz could mean more money for oil-rich Russia

Russia may be the beneficiary of the ongoing conflict between Iran and the U.S.-Israeli partnership, regardless of the outcome, because of the Kremlin’s calculation of its resources.

The U.S.-Iran war has resulted in a significant disruption in the global oil trade. On Tuesday, Brent Crude, the global benchmark, was at $91 per barrel, while West Texas Intermediate, the U.S. benchmark, was at $87. Part of the price spike was the result of Iran announcing that it had blocked the Strait of Hormuz. 

About 20% of the total global petroleum products annually pass through the critical chokepoint, along with a fifth of the world’s liquified natural gas. Because Russia’s oil doesn’t rely on the now-blocked strait, Moscow is in a position to fill the supply gap for major customers like India and China.

“Russia stands to benefit more than most from rising oil and gas prices. This could reinvigorate [Russian President Vladimir] Putin’s war economy at a time when it was beginning to show signs of serious strain,” Peter Dickinson of the Atlantic Council said in an essay for the think tank. 

Treasury Secretary Scott Bessent has issued a 30-day waiver to allow Indian refiners to purchase Russian oil. He said the stopgap measure will alleviate pressure caused by Iran’s attempt to “take global energy hostage.”

“This deliberately short-term measure will not provide significant financial benefit to the Russian government, as it only authorizes transactions involving oil already stranded at sea,” Mr. Bessent said on X. “India is an essential partner of the United States, and we fully anticipate that New Delhi will ramp up purchases of U.S. oil.”

Moscow and Tehran were “strategic partners” but never true allies like NATO,  or even Russia’s relationship with North Korea. Both countries signed a national defense clause in June 2024. 

Analysts say Russia specifically avoided language in agreements with Iran that would legally obligate it to fight on Tehran’s behalf if attacked. The ambiguity was a deliberate move by Mr. Putin to keep his options open with Israel and the Gulf States.

“So far, there is only one winner in this war — Russia. It steadily undermines Ukraine’s position by flouting international law. It gains new resources to finance its war against Ukraine as energy prices rise,” Antonio Costa, president of the European Council, said Tuesday in Brussels. “It profits from the diversion of military capabilities that could otherwise have been sent to support Ukraine.”

Speaking at the European Union’s ambassador conference, Mr. Costa said Russia also benefits from the reduced attention to the Ukrainian front as the conflict in the Middle East takes center stage.

“The war in the Middle East is of the utmost concern. Iran is, for sure, responsible for the root causes of this situation, but unilateralism can never be the path forward,” he said. “The European Union calls on all parties to exercise maximum restraint and return to the negotiating table.”

Iran is one of Russia’s few reliable military partners. A desperate and isolated regime in Tehran is likely to become even more dependent on Russia for military hardware and humanitarian aid, giving the Kremlin increased leverage. Moscow has bought more than $4 billion worth of weapons from Iran, mostly Shahed kamikaze drones.

Brian Whitmore, a senior fellow at the Atlantic Council’s Eurasia Center, said the U.S. and Israeli strikes on Iran have exposed that Russia is an unreliable ally. The leaders of the Islamic republic are learning the same lessons that officials in totalitarian states like Syria and Venezuela experienced.

“For all its talk of establishing a multipolar world, for all of its bluster about leading an anti-Western bloc of states, Moscow lacks the will and the capacity to come to the aid of its alleged partners,” Mr. Whitmore said. “The cold, hard reality is that the Putin regime is so consumed by its war of aggression against Ukraine that it lacks the bandwidth to defend its geopolitical interests elsewhere.”

Neither Russia nor China came to Iran’s aid beyond rhetoric and calls for urgent meetings of the United Nations’ Security Council.

Russia appears to be testing American capabilities on the home front as the U.S. wages a war against Iran’s clerical regime. Last week, two Russian maritime patrol aircraft flew through the Alaskan Air Defense Identification Zone, known as ADIZ. 

While Moscow’s aerial actions in the High North are nothing new, their March 4 incursion into Alaska’s ADIZ was the first since President Trump ordered the launch of Operation Epic Fury.

“Moscow likely wanted to test America’s Arctic monitoring and response capabilities amid the war in the Middle East,” said Emmerson Overell, with the Foundation for Defense of Democracies think tank. “NORAD’s [North American Aerospace Defense Command] response of six fighter jets, along with six refueling and ISR  [Intelligence, Surveillance, and Reconnaissance] aircraft, was likely intended as a strong signal to the Kremlin that although the United States is currently focused on Iran, its northern frontier remains heavily protected.”