Four weeks into the U.S.-Israeli war on Iran, the Kremlin is flush with cash. Russia’s average daily oil export earnings have reached an estimated €388 million per day, 20% above its daily average in February, according to the Centre for Research on Energy and Clean Air. Russia shipped 3.6 million barrels a day of crude in the four weeks to March 22, with a surge in both prices and shipments driving weekly income to its highest level since March 2022 — just after Putin’s troops first poured into Ukraine. The Financial Times branded Moscow “the biggest winner” of the conflict. But a closer look reveals a more complicated picture: the oil bonanza comes paired with a crumbling great-power image, a stalled diplomatic relationship with Washington, and a grinding war in Ukraine that no amount of petrodollars can resolve.
An Oil Lifeline at the Perfect Moment
The timing could not have been better for Moscow. Russia had a grim start to 2026, with fiscal revenues falling 11.6% in January year-on-year and the deficit reaching 1.7 trillion rubles (€18.1 billion). Before the war, Russia was forced to sell its oil at a discount of $10–$13 a barrel; now it is selling at a premium of $4–$5, according to Reuters. The swing came courtesy of Iran’s closure of the Strait of Hormuz — which removed roughly a fifth of global oil supply from the market — and, critically, Washington’s own decision to ease Russian sanctions to keep crude flowing.
India’s average daily imports of Russian oil jumped by 82% in the first three weeks of March compared to February, according to CREA data. China may also need to buy more Russian crude — roughly a third of its seaborne oil imports transit through the Strait of Hormuz, which remains effectively blocked. Even new customers are circling: countries like Thailand and Vietnam have already expressed interest in purchasing Russian oil.
A senior associate at CSIS called Russia “the biggest winner” of the conflict, noting the Kremlin can now sell previously discounted crude “at full market prices.” If the war drags on, the numbers become staggering. According to the KSE Institute at the Kyiv School of Economics, even a short conflict ending by mid-April could deliver roughly $161.3 billion in additional export revenue, with about $97 billion flowing directly into the Russian budget.
The Ukraine Dividend and Its Limits
Moscow’s gains extend beyond oil. The Iran war is draining the very weapons Kyiv depends on to survive. In the first 16 days of Operation Epic Fury, the U.S. used over 6,000 defensive and offensive munitions, including nearly 46% of its ATACMS and Precision Strike Missiles and nearly 40% of U.S.-operated THAAD interceptors. The Pentagon is now considering whether to divert weapons intended for Ukraine to the Middle East, a move that has alarmed European officials. President Zelensky warned that Kyiv will “definitely” face shortages of Patriot systems because of the Iran war, noting the U.S. produces 60 to 65 interceptor missiles per month — and 803 were used on the first day alone.
Russia has used the distraction to escalate. Moscow launched 948 drones in a single 24-hour period last week, one of the largest aerial attacks since the start of its war on Ukraine, while ground forces pressed their spring offensive against the Fortress Belt in Donetsk. The Institute for the Study of War assessed that Russian forces are “unlikely to seize the Fortress Belt in 2026 but will likely make some tactical gains at a significant cost”. The offensive has already cost Moscow around 10,000 casualties with minimal territorial gains.
The Counternarrative Putin Can’t Ignore
For all Moscow’s short-term gains, the war exposes uncomfortable truths. Russia’s image as a great power has suffered, as it has become apparent how little support it can provide its allies in Iran or even in Venezuela, where U.S. forces captured Nicolás Maduro at the start of the year. Moscow has been effectively cut out of the diplomacy to end the Iran conflict, as the Gulf states, Pakistan, and Turkey take the lead.
The deeper problem is structural. The ongoing war starves technological innovation of the resources Russia needs to stay competitive as the U.S., China, and others pour money into AI, quantum computing, and bioengineering. Russia does not make the top ten countries for AI investment and ranked sixtieth in the World Intellectual Property Organization’s 2025 Global Innovation Index. Each day the war in Ukraine continues, Russia falls farther behind in the great-power competition that will define the coming decades.
The diplomatic picture offers little comfort either. The trilateral talks between Washington, Moscow, and Kyiv that showed promise just six weeks ago have been “paused” indefinitely. Zelensky put it bluntly: “The geopolitical situation has become more complicated due to the war against Iran, and this, unfortunately, bolsters Russia’s confidence”.
Putin himself appears caught between windfall and wariness. He has avoided criticizing Trump personally — a sign, analysts say, that he still believes the American president will eventually help deliver a favorable settlement in Ukraine. But the consensus hardening among Russian elites tells a different story: Washington is not serious about normalizing relations, does not see Russia as a priority, and will project power wherever it pleases with no regard for Moscow’s interests. That assessment may not produce a sharp deterioration in bilateral ties — not while Putin clings to hope on Ukraine. But it is quietly reshaping how Moscow sees its place in a world order it can no longer shape.
Original analysis inspired by Thomas Graham from Council on Foreign Relations. Additional research and verification conducted through multiple sources.
