Is Russia the Winner of the Iran War?

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Moscow will see a boost in energy revenues, but its inability to protect Iran will hurt its standing in the Middle East.

Most observers seem to agree with The Wall Street Journal that “Russia is one of the biggest winners” from the Iran war. Nicole Grajewski called it a “tactical windfall” for Russia.

Above all, Russia stands to profit from the economic disruption caused by the war. The global oil price (Brent crude) rose from $60 in January to over $103 by March 13 due to the closure of the Strait of Hormuz, through which flows 20 percent of the world’s oil supply. The strait also carries 20 percent of the world’s liquefied natural gas, and Qatar’s Ras Laffan LNG facility has been temporarily shut down after being hit by Iranian drones. This has caused a 50 percent increase in natural gas prices in Europe. 

The price of Russian Urals blend crude oil has risen from under $40 per barrel in December to $89 by March 12. The discount given to India and China has shrunk from $25 to $4–5 per barrel. On March 5, the United States announced a 30-day suspension of the ban on Indian refineries buying Russian crude. Russia is a major exporter of aluminum and fertilizer, and prices for both are rising because manufacturing facilities in the Persian Gulf are no longer shipping to world markets.

The increased revenue from oil could not have come at a more opportune time for Russia. A stagnant GDP and low oil prices meant that revenue from oil and gas fell to $5 billion in January, and the federal government ran a budget deficit of $21 billion that month. The price spike will mean an additional $3–4 billion monthly revenue for Russia. Moscow had been planning serious budget cuts, but these have now been postponed to later in the year. 

A second way the war benefits Russia is that the United States is diverting its supply of missiles and interceptors to the Persian Gulf, leaving less available for Ukraine. The United States has a stock of over 22,000 missiles and reportedly fired off some 2,000........

© The National Interest