Oil prices are rising, and America’s attention and military resources have shifted to the Middle East.
Russian President Vladimir Putin may have lost another Kremlin-friendly leader, but a war on Iran could be a long-term boon for his country, whose economy depends on energy exports.
“So far, only one has won this war – Russia,” said European Council President António Costa on Tuesday while speaking to diplomats in Brussels about the Middle East conflict.
“It’s getting new resources to fund its war with Ukraine as energy prices go up,” Costa said. “It benefits from the diversion of military forces that would otherwise be sent to support Ukraine. It also benefits from less attention to the Ukrainian military as the conflict in the Middle East takes center stage.”
Although oil prices have eased since Sunday’s peak since Russia’s invasion of Ukraine, they remain high as shipping through the Strait of Hormuz, one of the world’s busiest oil shipping channels, which borders Iran to the north and is critical to the world’s energy supply, has stalled.
Iran said it would “burn” ships trying to pass through the narrow waterway, but a small number of vehicles continued.
At a meeting in the Kremlin on Monday, Putin told policymakers, ministers and business leaders that “it is important for Russian energy companies to take advantage of this opportunity.”
He also suggested that the European Union, which has been on a course to stop relying on Russian power, will reconsider “a long-term, stable partnership” with Moscow.
Russian media was abuzz on Monday and Tuesday with headlines and analysis about how rising oil prices will affect the country, but also its Western opponents. “Eastern Strike: Oil Price Could Exceed $150” read a headline in the pro-government Russian newspaper Izvestia.
Elsewhere, pro-Kremlin TV host Olga Skabeyeva joked on Tuesday about people in NATO neighbor Estonia having to walk because public transport was running out of gas.
After Putin’s meeting on Monday, President Donald Trump appeared to offer him another gift as he suggested his administration lift sanctions “on other countries” to stabilize the oil market.
He did not specify which countries could see their sanctions lifted, but his comments came after a phone call with Putin, his first since December.
Kremlin spokesman Dmitry Peskov said on Tuesday that the lifting of sanctions had not been discussed in 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 is a matter of a few weeks, the effect may be small, but if the conflict drags on for months, there could be a very significant impact on the Russian economy, said Petras Katinas, who studies climate, energy and defense at the Royal United Services Institute, a think tank based in London.
The discount at which Russia trades oil to compensate for the risk of using US sanctions has been declining since the crisis in Iran began, Katinas said in a telephone interview on Monday. “So if the prices stay long, Russia will be able to sell its crude oil on the world market at a lower discount,” he added.
This increase in oil prices could give Putin new money for his war efforts in Ukraine, cheap money that has been hampering the Russian economy, according to James Henderson at the Oxford Institute for Energy Studies.
“Nobody would be surprised if military spending went up because of this,” Henderson said. “More money will be available, so automatically, more money will be available to spend on war. That’s a really bad result.”
It comes at a critical time for peace talks to end the conflict in Ukraine, which appears to have stalled as the Trump administration turns its attention to Iran and the Middle East.
As Ukraine’s air defense missile stocks run out, President Volodymyr Zelenskyy said last week that all air defense missiles used to protect US assets and bases in the Middle East are draining US resources that could otherwise be found in Ukraine, another Kremlin statement said.
However, Trump’s diversion of attention away from Ukraine could be a double-edged sword for Russia, according to John Lough, head of foreign policy at the New Eurasian Strategies Center, a Washington and London-based think tank that focuses on Russia.
“It was very helpful to the Russian people that Trump pushed Zelenskyy into a corner and tried to extract a concession from him,” Lough said. “In many ways, Trump has been a source of support,” he added. “I think they have to accept that he’s not one of 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 of Russia, helping to arm its forces in Ukraine with drones, and Putin on Monday offered “unwavering support” to Mojtaba Khamenei, Iran’s new leader and the son of the country’s slain former head of state, Ali Khamenei. on the first day of US-Israel operations in Iran.
Russia has been providing intelligence to Iran through US military bases in the Middle East, four sources with knowledge of the matter told NBC News on Friday, although the Kremlin has not officially said it will provide military or intelligence assistance to Iran.
“This is another shame for the Russian people,” Lough said. “They have been shown to be an inappropriate and powerless actor,” he added. “So they’ve had to sit back and watch this, and I’m sure they’re not happy about that.”
