Revenues from Russian oil are skyrocketing amid rising prices in the midst of the war between the US and Iran.
Russia has earned an additional 6 billion euros in just under two weeks of conflict between the US and Iran, according to an analysis by the Center for Research on Energy and Clean Air (CREA).
Moscow's additional revenues from fossil fuels amount to 510 million euros (588 million dollars) per day and are enough for Russia to purchase 17,000 Shahed drones every 24 hours, at a cost of 35,000 dollars each, according to data published by the German NGO Urgewald.
As the US considers easing sanctions on Russian oil, Urgewald warns that such a move would offer Moscow a "significant financial gain" while Russia continues its war in Ukraine.
"This is a political choice. Governments can maintain their position on sanctions or signal that if energy prices rise high enough, the West will always find a reason to give in. This choice will not only prolong Ukraine's suffering. It will undermine Europe's security as a whole," said Alexander Kirk from Urgewald.
Russia consistently launches Shahed drones in massive attacks on cities and critical infrastructure in Ukraine. Only on the morning of March 7, Russian forces launched 480 drones.
The money is coming after two "dead" months
The Iran war could be an advantage for Russia as global energy market turmoil changes calculations for the world's largest oil state, experts say.
Moscow heavily relies on its colossal revenues from oil and gas to finance the invasion in Ukraine. But the months of January and February of this year were financially bleak for Russia - low oil prices, the looming threat of global oil oversupply, and increasingly harsh sanctions have put pressure on the Russian energy sector.
Each barrel of oil brought in only 61% of the Russian Ministry of Economy's target for the first two months of the year, according to calculations by the Eurasian Strategy Center. The International Monetary Fund had previously lowered growth forecasts for Russia to 0.8% for 2026, and the Kremlin was already planning for lower fiscal revenues and expenditures this year.
However, energy prices have sharply risen following American-Israeli attacks on Iran. Traffic through the Strait of Hormuz, a vital artery for global energy transport, halted after Iran retaliated by attacking tankers in the strait and energy infrastructure throughout the region.
The tide has turned
"The implications for the energy market are extremely good news for Russia, especially regarding crude oil," said Ben McWilliams, an affiliate at the Brussels-based think tank Bruegel, quoted by Kiev Independent.
After the Kremlin launched the invasion in 2022, sanctions led buyers to abandon Russian oil, forcing trading at a much lower price compared to global prices. But disruptions in the energy markets are driving price increases, and buyers are forced to turn to Moscow.
"If we have a truly well-supplied oil market and the Strait of Hormuz is open, it is less attractive to buy sanctioned Russian oil, while now, Russian stocks are more in demand and come with higher prices as they are in a stronger negotiating position," explained McWilliams.
The price Russia needs for the war in Ukraine
The exact price per barrel received by Russia is not entirely transparent, but there are already signs of increased demand and consequently higher prices. These generate higher government revenues.
"Before the Iran war, (the Russians) were getting about $40 per barrel. With the latest price movement, they are getting around $59 per barrel," said Luke Cooper, a researcher at the London School of Economics.
This is exactly the price the Kremlin needs to finance the war in Ukraine without suffering. "Russia needs about $59 per barrel" to meet the Ministry of Economy's objectives and remain in line with the projected budget deficit, the expert mentioned.