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TRANSCRIPT
In just a few weeks, since the US-Israeli war on Iran broke out, data suggests that Russia has made almost $AU10 billion from selling fossil fuels.
As oil prices soar and Iran vows to keep the Strait of Hormuz closed, panic about global fuel supplies has some observers worried that Russia is set to gain.
Isaac Levi is an analyst at the Centre for Research on Energy and Clean Air.
He says Russia is the main beneficiary of the war.
"So as a result of the Iran crisis and the blockage of this maritime strait, 20 per cent of LNG, liquefied natural gas, and a huge proportion of the world's oil has not been able to flow onto global markets. This means that Russia has stepped in to supply that oil and gas to the global markets at increasing prices. So what our report shows is a 17 per cent increase in Russia's oil export earnings in the first week of March compared to in February."
While Russia has a "Comprehensive Strategic Partnership" agreement with Iran, it wasn't until this week that President Vladimir Putin reaffirmed the Kremlin's "unwavering support" for Tehran.
Despite their own war of attrition on neighbouring Ukraine, Russian Foreign Ministry Spokeswoman Maria Zakharova says Russia wants a return to "good neighbourly principles".
"We consider attacks on civilian targets and infrastructure in Iran, neighbouring Arab countries, and elsewhere unacceptable. We call on the United States and Israel to cease their aggression and return to the negotiating table. It is imperative that all parties to the current conflict in the Middle East, including our Arab partners, demonstrate common sense and restraint, renounce double standards, and return to efforts to end the confrontation as quickly as possible based on good-neighbourly principles."
But, despite their vocal opposition to the war, analysts say Russia will be looking to boost its economy.
Following Russia's invasion of Ukraine, India became one of the largest buyers of Russian seaborne crude oil.
After the US slapped sanctions on Russia's two largest oil companies at the end of 2025, India reduced its imports of Russian oil.
But as oil prices soared and panic spread over supply, US Treasury Secretary Scott Bessent announced last week that those sanctions would be lifted.
"The Indians had been very good actors. We had asked them to stop buying sanctioned Russian oil this fall. They did. They were going to substitute it with US oil. But to ease the temporary gap of oil around the world, we have given them permission to accept the Russian oil. We may unsanction other Russian oil. The other thing Treasury can do here, Larry, is there are hundreds of millions of sanctioned barrels of sanctioned crude on the water. And in essence, by unsanctioning them, Treasury can create supply. And we are looking at that."
Isaac Levi says that since oil supplies from the Gulf region are now under significant stress, India will be turning back to Russian oil.
"However, as they used to buy a lot of oil from those Gulf countries that it now can't get access to in the current crisis, they have increased their imports of Russian oil, lots of tankers that were sitting idle in the sea with no destination have started to show signs that they will be offloading in India. So that will be the biggest shift in terms of where Russia will increase their export revenues, it's likely going to be in India."
With the strategic partnership with Iran stopping short of a mutual defence treaty, Russia is also using the war to deepen ties with the United States.
US President Donald Trump says Vladimir Putin wants to be "helpful" in the war, with US-Russia talks in Florida on Thursday described as "productive" by Vladimir Putin's envoy.
After the meeting in Florida, Russian negotiator Kirill Dmitriev told reporters that the US was "beginning to better understand" the importance of Russian oil.
"We discussed both promising economic projects and the restoration of relations between Russia and the United States. We also discussed the energy crisis currently unfolding globally. We see that an increasing number of countries, including the United States, are coming to understand the key role of Russian energy — Russian oil and gas — in ensuring stability in global markets, as well as the harmful and ineffective nature of the existing sanctions against Russia’s energy sector."
While India, China and Turkiye are among the biggest buyers of Russian crude oil, Isaac Levi says the majority of Russian gas is going to the European Union.
"So gas, the majority of Russia gas, is going to the EU either through the remaining pipeline that goes through Turkey and enters the EU there, or on shipments of liquefied natural gas, mostly going to France, Belgium, Netherlands, and Spain. So those are the biggest buyers of the gas that Russia has been exporting."
For the past four years, Europe has sought to reduce their reliance on Russian fossil fuels, depriving Russia of a key market and forcing it to sell oil and gas at a discount to Asian markets.
With the lifting of some sanctions and moves to ease restrictions further, European Union Council President Antonio Costa says Russia is the only winner in this war.
"There is only one winner in this war: Russia. It steadily undermines Ukraine's position by flouting international law. It gains new resources to finance its war against Ukraine as energy prices rise. It profits from the diversion of military capabilities that could otherwise have been sent to support Ukraine. And it benefits from the reduced attention to the Ukrainian front as the conflict in the Middle East takes centre stage."
Despite objections, the European Commission is now instructing governments to be flexible in enforcing EU rules on gas imports.
The main country affected by this softening of the rules will be Azerbaijan, which supplied 4 per cent of EU gas imports last year.
But Azeri gas reaches Europe via Turkiye, which is a major importer of Russian gas.
Isaac Levi says the longer the war on Iran continues, the stronger Russia's ability to finance its war on Ukraine will be.
"The longer the crisis goes on and pushing up energy prices, this is going to benefit Russia. It's providing more money for them to pay for drones, weapons, recruitment of soldiers in Russia that are causing death and destruction in Ukraine. So sadly the current situation of increased oil and gas prices is going to be very difficult for Ukraine. It's going to provide increased resources for Russia to finance that war in Ukraine Additionally, it's sadly reducing the appetite of sanctions on the Russian fossil fuel sector. We've seen the US provide a waiver in their sanctions, which enables India and those other countries to buy more and more Russian fossil fuels used to finance that war in Ukraine."
