Why Russia's Putin May Be The Biggest Winner Of Trump's Iran War

For most of last year, since Donald Trump returned to the White House, Washington has sought to starve Russia's energy trade, fuelling what it called Moscow's "war machine", in part by removing two of its most loyal customers -- India and China. The White House slapped massive tariffs on New Delhi's exports and sanctioned two of Russia's largest oil firms. The plan appeared to be working till Trump launched a war on Iran, hindering exports from the vital energy-producing region.

This left the Kremlin well placed to emerge as one of the main beneficiaries of the expanding conflict in the Middle East. Last week, the US granted Indian refiners a 30-day waiver to buy Russian oil currently stranded at sea. US Treasury Secretary Scott Bessent said the move was "to enable oil to keep flowing into the global market."

He also said the US could ease more Ukraine-related sanctions on Russian oil to help increase global supplies.

Putin's Worries 

When Russian President Vladimir Putin entered 2026, he had two choices-- either limit his so-called special military operation in Ukraine or risk serious damage to his economy. Moscow's budget plan for this year assumed a baseline benchmark of $59 per barrel of Urals crude, the country's main export blend. However, owing to Western sanctions, high interest rates, and labour shortages, energy revenues plunged to their lowest level since 2020 in January, compounding a disappointing tax haul.

As Russia's finance ministry and the central bank discussed how to mitigate the damage, Trump handed Putin a solution. US-Israeli strikes on Iran have sent oil prices soaring, giving a boost to the Kremlin's main source of revenue.

After Iranian oil facilities were bombed this weekend, benchmark crude prices soared above $100 per barrel, hitting their highest mark since the summer of 2022, when markets spiked following Russia's full-scale invasion of Ukraine. The surge in oil prices amounted to an economic windfall at a crucial moment for Russia as the cost of the Ukraine war threatened to spill over into a domestic economic crisis.

"The (Russian) government was facing tough choices and had to cut its spending and raise taxes and even consider some reduction in military expenditure," Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Centre, told Politico. 

Then the US, with Israel, attacked Iran. As Tehran retaliated, spilling the conflict into a regional war, shipping through the Strait of Hormuz was stalled, sending oil prices soaring.

"Suddenly, Moscow received this gift...They had their lifeline," Vladimir Milov, a former deputy energy minister turned Kremlin critic in exile, told Politico.

According to Milov, these days Russian officials are "very, very happy."

Profits For Moscow

AFP

According to the US media report, amid the global oil crisis, Russian crude may now fetch premium prices instead of selling at a discount because of Western sanctions, as its main buyers -- India and China -- scramble to secure supplies with Washington's blessing. 

After speaking with Putin, Trump said the United States will waive oil-related sanctions on "some countries" to ease the shortage. 

Trump also had a call on Monday with Putin to discuss the war and other issues. Putin's foreign affairs adviser, Yuri Ushakov, said Putin "voiced a few ideas regarding a quick political and diplomatic settlement" of the conflict following his conversations with Gulf leaders and Iranian President Masoud Pezeshkian.

Unsurprisingly, the Kremlin is using the moment to maximum advantage. 

"Russia was and continues to be a reliable supplier of both oil and gas," Putin's spokesperson Dmitry Peskov said on Friday in what sounded like a sales pitch. He added that demand for Russian energy products had increased.

Meanwhile, Kremlin aide Kirill Dmitriev posted a series of posts on X, gloating that "the oil shock tsunami is just beginning." He also criticised Europe's decision to cut itself off from Russian energy as "a strategic mistake."