Flashpoints | Economy

How the Iran War Could Boost Russia’s Role in Asia’s Energy Future

If instability around Hormuz persists, it could accelerate Russia’s long-planned – and long-stalled – “pivot to Asia.”

The Israel-U.S. war on Iran and the effective closure of the Strait of Hormuz have injected a new level of uncertainty into global energy markets. For Asia’s major importers, especially China and India, the crisis is an immediate threat: it disrupts crude and liquefied natural gas (LNG) flows and pushes prices higher. For Russia, however, the same shock creates an opening to deepen its long‑term role as a core hydrocarbon supplier to Asia.

This is not a story of Russia effortlessly replacing the Middle East. Western Siberia’s mature fields are depleting, sanctions have slowed new projects, and export infrastructure to Asia remains limited. But if instability around Hormuz persists, it could accelerate Russia’s long‑planned “pivot to Asia” by making Russian oil and gas relatively more attractive, and by justifying the large, long‑lived investments Moscow needs Asia to help finance.

Russia’s Energy Sector Was Under Pressure Before the Crisis

Since the invasion of Ukraine in February 2022, Russia’s oil and gas sector has been under severe strain. Repeated waves of Western sanctions, Ukrainian drone and missile strikes on refineries, and an oil price that often sat below $70 per barrel have eroded exports and state revenues.

In early 2025, Washington imposed its toughest energy sanctions to date, hitting major producers, refineries, offshore projects, LNG plants, and more than 180 tankers and service companies. Later that year, the United States also sanctioned Rosneft and Lukoil while stepping up pressure on India over its purchases of Russian crude. The European Union, meanwhile, approved a phased ban on Russian gas imports, aiming for a halt by the end of 2027.

Even in crude oil, where Moscow initially managed to redirect most barrels from Europe to Asia, cracks were emerging. Russian seaborne exports slipped from around 4.3 million barrels per day in 2025 to roughly 2.8 million barrels per day in February 2026, with Indian refiners cutting Russian purchases under U.S. pressure and turning to alternative suppliers. Russian gas was hit even harder: production and LNG exports declined in 2025, and the flagship Arctic LNG‑2 project struggled to ramp up.

That was the backdrop when the Iran war and the Hormuz crisis erupted.

Hormuz: Asia’s Chokepoint and Russia’s Opportunity

The Strait of Hormuz is the only sea route from the Persian Gulf to the Indian Ocean. Roughly 20 percent of global oil consumption and around 30 percent of LNG trade transits this narrow corridor, with most of those flows heading to Asian markets such as China, India, Japan, and South Korea. Several major shipping firms have now suspended traffic as Iranian strikes and threats make the route too risky to use, even when formally “open.”

China and India are among the most exposed large economies. China is the world’s largest oil and gas importer. About 13 percent of its crude imports come from Iran, and roughly 40 percent of its total crude imports transit Hormuz. Around 30 percent of its LNG imports come from Qatar and the United Arab Emirates, which also rely on the strait. India imports close to 85-90 percent of its crude needs, with about half of that oil coming from Gulf suppliers via Hormuz, roughly 2.5-2.6 million barrels per day. It imports around half of its natural gas demand as LNG, more than 50 percent of which comes from Qatar and the United Arab Emirates (UAE).

For both countries, the war on Iran is unambiguously negative in the short term, bringing higher prices, heightened freight and insurance costs, and mounting macroeconomic pressure. But it also forces Beijing and New Delhi to reassess a long‑standing assumption: that Middle Eastern oil and gas will always be available, at scale, via the same maritime routes. That reassessment is where Russia’s potential upside lies.

China: Pipeline Leverage and Arctic Routes

China was already the anchor of Russia’s post‑Europe energy strategy before the current crisis. Moscow has steadily increased crude deliveries to China in recent years, both via the Eastern Siberia-Pacific Ocean pipeline system and by sea from ports like Kozmino, while pipeline gas exports through the Power of Siberia 1 link have grown as the line ramps up toward its design capacity.

The Hormuz disruption strengthens the case in Beijing for diversifying away from Gulf chokepoints, not only by boosting domestic production and non‑fossil energy, but also by deepening overland and Arctic energy links with Russia. On gas, this supports Gazprom’s plans to expand Power of Siberia 1, as well as the long‑debated Power of Siberia 2 project through Mongolia. Recent agreements between Russia and China to raise deliveries on the “Eastern Route” highlight this trajectory, and the Iran crisis gives Moscow new arguments in price and volume talks.

Russia cannot fully replace Middle Eastern flows to China, especially in the short term. Spare upstream capacity is limited, and export terminals in the Far East and Arctic are still constrained. But even partial substitution matters. If China sees a persistent risk of disruption in the Gulf, Russian supplies from the Pacific, and future Arctic shipments along the Northern Sea Route look more valuable as hedges. 

Over the long term, China’s own strategy will cap how far this can go. Beijing is trying to reduce structural reliance on imported hydrocarbons by electrifying transport and industry and scaling up domestic low‑carbon energy. Even so, most projections still show Chinese gas demand rising well into the 2030s, and oil demand declining only slowly. In that window, a prolonged Hormuz shock could leave Russia with a significantly larger and more entrenched slice of China’s energy mix.

India: A Fragile But Deepening Partnership

India’s relationship with Russia as an energy supplier is no less important to Moscow. Since 2022, Indian refiners have dramatically increased purchases of discounted Russian crude, which at one point accounted for around 40 percent of India’s total crude imports.

That trend began to reverse last year as U.S. sanctions and tariff threats targeted specific Indian buyers. Major refiners paused or scaled back Russian purchases, and Indian import data started to show a shift back toward other suppliers. The war on Iran complicates that recalibration. With about half of India’s crude imports and more than half of its LNG supplies exposed to Hormuz, New Delhi has far less room to maneuver than before. Washington’s leverage has not disappeared, but the cost of ignoring discounted Russian oil has risen.

In the near term, the most likely effect is a stabilization, and possibly a renewed increase, in seaborne Russian crude deliveries to India, reversing recent declines. Higher oil prices and freight costs will hurt India’s trade balance, but discounts on Russian barrels can soften the blow. 

Over the medium term, as Russia brings more LNG capacity online and if some of its planned projects survive sanctions and financing constraints, New Delhi and Moscow have clear incentives to explore a broader gas partnership as well, even if the absence of a pipeline link limits volumes.

Russia’s Long‑term Bet on Asia

For Moscow, the Iran crisis comes at a time when its energy strategy is already oriented firmly eastward. The core objective is to replace lost European demand by becoming a primary hydrocarbon supplier to China and India, while using the resulting revenues to develop new resource bases far from Europe.

That vision rests on several pillars: new pipelines to China; large‑scale field developments in Eastern Siberia and the Arctic; an ambitious build‑out of LNG plants along the Arctic coast and in the Baltic; and the transformation of the Northern Sea Route into a year‑round export corridor for Asian‑bound cargoes. Higher and more predictable flows to Asian buyers make all these projects easier to finance and defend economically inside Russia.

Sanctions, technology limits, and domestic bottlenecks mean Russia cannot simply step into the Middle East’s shoes, while China and India will keep diversifying away from fossil fuels and any single supplier. Yet if a prolonged Iran war makes Gulf supplies seem structurally less reliable, even a constrained Russia becomes more attractive, potentially tipping decisions on Power of Siberia 2, long‑term LNG offtake, and joint upstream projects in Moscow’s favor.

In the short term, Russia’s gains from the Iran war are mostly about price and volumes: higher benchmark prices support the federal budget, and Asian buyers under pressure from Hormuz disruptions are more likely to keep buying Russian supplies despite sanctions. If the crisis endures, however, it could lock in deeper structural energy ties between Russia and Asia’s two biggest importers, reshaping the regional hydrocarbon landscape for decades.

Europe, by contrast, is unlikely to re‑embrace Russian energy, with policy focused on diversification and decarbonization rather than re‑engagement, leaving Asia as the only realistic anchor for Moscow’s energy future. Whether Russia ultimately capitalizes on this moment will depend on the course of the war in Iran, the resilience of sanctions, and the politics of energy transition in Beijing and New Delhi. But while the epicenter of geopolitical risk may lie in the Gulf, the most profound shifts in energy relationships are playing out thousands of kilometers to the east.

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The Israel-U.S. war on Iran and the effective closure of the Strait of Hormuz have injected a new level of uncertainty into global energy markets. For Asia’s major importers, especially China and India, the crisis is an immediate threat: it disrupts crude and liquefied natural gas (LNG) flows and pushes prices higher. For Russia, however, the same shock creates an opening to deepen its long‑term role as a core hydrocarbon supplier to Asia.

This is not a story of Russia effortlessly replacing the Middle East. Western Siberia’s mature fields are depleting, sanctions have slowed new projects, and export infrastructure to Asia remains limited. But if instability around Hormuz persists, it could accelerate Russia’s long‑planned “pivot to Asia” by making Russian oil and gas relatively more attractive, and by justifying the large, long‑lived investments Moscow needs Asia to help finance.

Russia’s Energy Sector Was Under Pressure Before the Crisis

Since the invasion of Ukraine in February 2022, Russia’s oil and gas sector has been under severe strain. Repeated waves of Western sanctions, Ukrainian drone and missile strikes on refineries, and an oil price that often sat below $70 per barrel have eroded exports and state revenues.

In early 2025, Washington imposed its toughest energy sanctions to date, hitting major producers, refineries, offshore projects, LNG plants, and more than 180 tankers and service companies. Later that year, the United States also sanctioned Rosneft and Lukoil while stepping up pressure on India over its purchases of Russian crude. The European Union, meanwhile, approved a phased ban on Russian gas imports, aiming for a halt by the end of 2027.

Even in crude oil, where Moscow initially managed to redirect most barrels from Europe to Asia, cracks were emerging. Russian seaborne exports slipped from around 4.3 million barrels per day in 2025 to roughly 2.8 million barrels per day in February 2026, with Indian refiners cutting Russian purchases under U.S. pressure and turning to alternative suppliers. Russian gas was hit even harder: production and LNG exports declined in 2025, and the flagship Arctic LNG‑2 project struggled to ramp up.

That was the backdrop when the Iran war and the Hormuz crisis erupted.

Hormuz: Asia’s Chokepoint and Russia’s Opportunity

The Strait of Hormuz is the only sea route from the Persian Gulf to the Indian Ocean. Roughly 20 percent of global oil consumption and around 30 percent of LNG trade transits this narrow corridor, with most of those flows heading to Asian markets such as China, India, Japan, and South Korea. Several major shipping firms have now suspended traffic as Iranian strikes and threats make the route too risky to use, even when formally “open.”

China and India are among the most exposed large economies. China is the world’s largest oil and gas importer. About 13 percent of its crude imports come from Iran, and roughly 40 percent of its total crude imports transit Hormuz. Around 30 percent of its LNG imports come from Qatar and the United Arab Emirates, which also rely on the strait. India imports close to 85-90 percent of its crude needs, with about half of that oil coming from Gulf suppliers via Hormuz, roughly 2.5-2.6 million barrels per day. It imports around half of its natural gas demand as LNG, more than 50 percent of which comes from Qatar and the United Arab Emirates (UAE).

For both countries, the war on Iran is unambiguously negative in the short term, bringing higher prices, heightened freight and insurance costs, and mounting macroeconomic pressure. But it also forces Beijing and New Delhi to reassess a long‑standing assumption: that Middle Eastern oil and gas will always be available, at scale, via the same maritime routes. That reassessment is where Russia’s potential upside lies.

China: Pipeline Leverage and Arctic Routes

China was already the anchor of Russia’s post‑Europe energy strategy before the current crisis. Moscow has steadily increased crude deliveries to China in recent years, both via the Eastern Siberia-Pacific Ocean pipeline system and by sea from ports like Kozmino, while pipeline gas exports through the Power of Siberia 1 link have grown as the line ramps up toward its design capacity.

The Hormuz disruption strengthens the case in Beijing for diversifying away from Gulf chokepoints, not only by boosting domestic production and non‑fossil energy, but also by deepening overland and Arctic energy links with Russia. On gas, this supports Gazprom’s plans to expand Power of Siberia 1, as well as the long‑debated Power of Siberia 2 project through Mongolia. Recent agreements between Russia and China to raise deliveries on the “Eastern Route” highlight this trajectory, and the Iran crisis gives Moscow new arguments in price and volume talks.

Russia cannot fully replace Middle Eastern flows to China, especially in the short term. Spare upstream capacity is limited, and export terminals in the Far East and Arctic are still constrained. But even partial substitution matters. If China sees a persistent risk of disruption in the Gulf, Russian supplies from the Pacific, and future Arctic shipments along the Northern Sea Route look more valuable as hedges. 

Over the long term, China’s own strategy will cap how far this can go. Beijing is trying to reduce structural reliance on imported hydrocarbons by electrifying transport and industry and scaling up domestic low‑carbon energy. Even so, most projections still show Chinese gas demand rising well into the 2030s, and oil demand declining only slowly. In that window, a prolonged Hormuz shock could leave Russia with a significantly larger and more entrenched slice of China’s energy mix.

India: A Fragile But Deepening Partnership

India’s relationship with Russia as an energy supplier is no less important to Moscow. Since 2022, Indian refiners have dramatically increased purchases of discounted Russian crude, which at one point accounted for around 40 percent of India’s total crude imports.

That trend began to reverse last year as U.S. sanctions and tariff threats targeted specific Indian buyers. Major refiners paused or scaled back Russian purchases, and Indian import data started to show a shift back toward other suppliers. The war on Iran complicates that recalibration. With about half of India’s crude imports and more than half of its LNG supplies exposed to Hormuz, New Delhi has far less room to maneuver than before. Washington’s leverage has not disappeared, but the cost of ignoring discounted Russian oil has risen.

In the near term, the most likely effect is a stabilization, and possibly a renewed increase, in seaborne Russian crude deliveries to India, reversing recent declines. Higher oil prices and freight costs will hurt India’s trade balance, but discounts on Russian barrels can soften the blow. 

Over the medium term, as Russia brings more LNG capacity online and if some of its planned projects survive sanctions and financing constraints, New Delhi and Moscow have clear incentives to explore a broader gas partnership as well, even if the absence of a pipeline link limits volumes.

Russia’s Long‑term Bet on Asia

For Moscow, the Iran crisis comes at a time when its energy strategy is already oriented firmly eastward. The core objective is to replace lost European demand by becoming a primary hydrocarbon supplier to China and India, while using the resulting revenues to develop new resource bases far from Europe.

That vision rests on several pillars: new pipelines to China; large‑scale field developments in Eastern Siberia and the Arctic; an ambitious build‑out of LNG plants along the Arctic coast and in the Baltic; and the transformation of the Northern Sea Route into a year‑round export corridor for Asian‑bound cargoes. Higher and more predictable flows to Asian buyers make all these projects easier to finance and defend economically inside Russia.

Sanctions, technology limits, and domestic bottlenecks mean Russia cannot simply step into the Middle East’s shoes, while China and India will keep diversifying away from fossil fuels and any single supplier. Yet if a prolonged Iran war makes Gulf supplies seem structurally less reliable, even a constrained Russia becomes more attractive, potentially tipping decisions on Power of Siberia 2, long‑term LNG offtake, and joint upstream projects in Moscow’s favor.

In the short term, Russia’s gains from the Iran war are mostly about price and volumes: higher benchmark prices support the federal budget, and Asian buyers under pressure from Hormuz disruptions are more likely to keep buying Russian supplies despite sanctions. If the crisis endures, however, it could lock in deeper structural energy ties between Russia and Asia’s two biggest importers, reshaping the regional hydrocarbon landscape for decades.

Europe, by contrast, is unlikely to re‑embrace Russian energy, with policy focused on diversification and decarbonization rather than re‑engagement, leaving Asia as the only realistic anchor for Moscow’s energy future. Whether Russia ultimately capitalizes on this moment will depend on the course of the war in Iran, the resilience of sanctions, and the politics of energy transition in Beijing and New Delhi. But while the epicenter of geopolitical risk may lie in the Gulf, the most profound shifts in energy relationships are playing out thousands of kilometers to the east.

Lukian De Boni is an analyst at Stratas Advisors, a U.S. energy consultancy, and the firm’s main Russia specialist.

China-Russia energy trade

India-Russia energy trade

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