Oil prices are soaring, and America’s attention and its military resources have shifted decisively to the Middle East.
Russian President Vladimir Putin may have lost another Kremlin-friendly leader, but the Iran war could prove a long-term boon for his country, whose economy is dependent on energy exports.
“So far, there is only one winner in this war — Russia,” European Council President António Costa said Tuesday as he addressed ambassadors in Brussels on the conflict in the Middle East.
“It gains new resources to finance its war against Ukraine as energy prices rise,” Costa said. “It profits from the diversion of military capabilities that could otherwise have been sent to support Ukraine. And it benefits from reduced attention to the Ukrainian front as the conflict in the Middle East takes center stage.”
While oil prices have come down since hitting a high on Sunday not seen since Russia’s invasion of Ukraine, they remained high as shipping through the Strait of Hormuz, one of the world’s busiest oil shipping channels, which is bordered to the north by Iran and crucial to the global energy supply, stayed at a virtual halt.
Iran has said it would “set fire” to ships trying to pass through the narrow waterway, but a small amount of traffic has continued.
At a meeting at the Kremlin on Monday, Putin told policymakers, ministers and business chiefs that it was “important for Russian energy companies to make use of the current moment.”
He also suggested that the European Union, which has been charting a course away from dependency on Russian energy, would have a rethink toward a “long-term, stable cooperation” with Moscow.
Russian media was awash Monday and Tuesday with headlines and analysis about how the soaring oil prices will affect the country, but also its adversaries in the West. “Eastern Strike: Oil Price Could Surpass $150” read the headline in Russia’s pro-government Izvestia newspaper.
Elsewhere, firebrand pro-Kremlin TV host Olga Skabeyeva quipped Tuesday about people in the neighboring NATO nation of Estonia having to walk because public transport was already running out of fuel.
After Putin’s meeting Monday, President Donald Trump appeared to hand him another gift as he suggested his administration was lifting sanctions on “some countries” to stabilize the oil market.
He did not elaborate on which countries might see their sanctions lifted, but his comments came shortly after a call with Putin, their first since December.
Kremlin spokesperson Dmitry Peskov said Tuesday that the lifting of sanctions had not been discussed on the call “in any detailed way.”
How much Russia will benefit from the oil crisis depends on how long the conflict in the Middle East will last, several analysts told NBC News.
If it’s a matter of several weeks, the effect might be minimal, but if the conflict drags on for months, there could be a much more significant infusion for the Russian economy, said Petras Katinas, a research fellow in climate, energy and defense at the Royal United Services Institute, a London-based think tank.
The discount that Russia trades its oil at to compensate for the risk of running afoul of U.S. sanctions has been shrinking since the crisis in Iran started, Katinas said in a telephone interview Monday. “So the longer the prices last, the more Russia will be capable of selling its crude oil in the global market with a lower discount,” he added.
This boost in oil revenue would likely hand Putin new revenue for his war effort in Ukraine, an enormous expenditure that has been draining Russia’s economy, according to James Henderson at the Oxford Institute for Energy Studies.
“No one would be surprised if military spending went up as a result of this,” Henderson said. “More money will be available, and therefore, by default, more money will be available for spending on the military. That is definitely an unfortunate consequence.”
It comes at a delicate time for peace negotiations to end the war in Ukraine, which appear to have stalled as the Trump administration has shifted its focus toward Iran and the Middle East.
As stocks of Ukrainian air defense missiles deplete, President Volodymyr Zelenskyy said last week that every air defense missile used to protect U.S. assets and bases in the Middle East drains American resources that could have been available to Ukraine, in yet another win for the Kremlin.
However, the diversion of Trump’s attention away from Ukraine could be a double-edged sword for Russia, according to John Lough, the head of foreign policy at the New Eurasian Strategies Centre, a think tank based in both Washington and London that focuses on Russia.
“It’s been very helpful for the Russians to have Trump pushing Zelenskyy into the corner and trying to extract concessions from him,” Lough said. “In many ways, Trump has been a source of support for them,” he added. “I think they have to accept that he is out of the picture for them.”
The conflict in the Middle East has also exposed Russia’s declining role in the region, Lough said.
Iran has been a strategic partner for Russia, helping to equip its army in Ukraine with drones, and Putin on Monday offered “unwavering support” to Mojtaba Khamenei, Iran’s new supreme leader and a son of its former head of state, Ali Khamenei, who was killed on the first day of the U.S.-Israeli operation in Iran.
Russia has also been providing intelligence to Iran on the location of U.S. forces in the Middle East, four sources with knowledge of the matter told NBC News on Friday, although the Kremlin has not officially said it would provide military or intelligence assistance to Iran.
“This is another humiliation for the Russians,” Lough said. “They have been shown to be an actor that is not relevant and does not have the influence,” he added. “So they have had to sort of sit back and watch this, and I am sure that is extremely unpleasant for them.”