Russia is experiencing a significant financial boost from the US-Israeli war on Iran. Reuters calculates that the country’s main oil tax revenue doubled to $9 billion in April alone, making Moscow one of the key winners in this severe energy crisis. According to Reuters, Russia’s mineral extraction tax on oil output is expected to reach about 700 billion roubles ($9 billion) in April, up from 327 billion roubles in March. This nearly doubles the revenue, driven largely by the disruption of shipping through the Strait of Hormuz and the subsequent global oil price shock.
Russia’s average daily oil export revenues also increased, rising from $135 million in January to $270 million in March. The Kremlin, which had planned to cut non-security spending by 10%, completely abandoned those plans and continued to fund its war in Ukraine as if nothing had changed. A Kremlin insider quoted by The Guardian stated, “For our budget, the attack on Iran is a big plus.” Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center, told CNBC that the increase was substantial. He noted it allowed Putin to delay planned cuts to state spending that would have been very unpopular. “What he was spending on the war meant he was basically pawning the country. Now, he doesn’t have to do that anymore,” he said.
The financial gains extend beyond crude oil. Tehran’s control over the Strait of Hormuz has also pushed up prices for aluminum, liquefied natural gas, and fertilizers. Aluminum prices have increased by 12%, while urea prices have surged nearly 75% since the conflict began. The potential for further financial gains is huge. The KSE Institute estimates that Russia could receive between $45 billion and $151 billion in additional budget revenues by 2026, depending on how long the conflict lasts. This projection includes higher prices, recovering export volumes, a smaller discount on Russian crude, and revenues from other energy exports.
However, there are limitations. Ukraine’s ongoing attacks on Russian energy infrastructure have disrupted at least 40% of Russia’s oil export capacity—marking the most significant interruption of oil shipments in the country’s modern history. This situation could dampen some of the price-related gains. The findings from Reuters offer the clearest evidence yet that the war in Iran, which is causing suffering for millions in the Middle East, is also providing a financial boost to support the Kremlin’s military efforts.