The risk perception created along the Strait of Hormuz following the attacks on Iran is generating a sharp wave of volatility in the global energy market, one that could deeply impact the global economy. The initial reflections of this wave are already visible: oil prices surging from the $70 range to above $80 in the early days of the conflict, and a price spike of more than 25% in the European gas market within just a few days.[1] This emerging picture, while reigniting the debate over energy supply security, is simultaneously opening an unexpected revenue window for Russia and strengthening its hand against Europe.
The Moscow administration has stated that demand for Russian oil and gas has increased significantly in the wake of the escalating crisis caused by the war.[2] It is noteworthy that Ural crude, which had long been sold at a discount to Brent prices, particularly for imports to India, is now, for the first time, commanding a premium. This indicates that Russia has secured a more advantageous price level compared to the pre-war period. For the Russian economy, which has been facing sanctions due to the war in Ukraine, this development creates a significant breathing room in the budget equation.
The decline in Russian energy revenues in 2025 had already been placing considerable pressure on the financing of the war economy.[3] However, the emerging price regime is positioning itself as a factor that is pulling Russia’s oil and gas revenues back upward. In this context, rising energy revenues provide a suitable foundation both for covering the costs of the Ukrainian front and for continuing the pursuit of stability through social spending in domestic politics. In the short term, Moscow’s energy card appears to have been strengthened in an unexpected way.
One of the key pillars of this short-term gain is emerging in the Indian and Chinese markets. The fact that Russian oil bound for India is now finding buyers at higher prices, due to the strain on alternative suppliers from the elevated risk in the Strait of Hormuz, represents a striking shift for Russia. The trade long defined as discounted Russian oil is temporarily reversing course, partly due to this crisis. A similar surge in demand is evident on the Chinese front as well. The Beijing administration is moving to purchase more crude oil and liquefied natural gas (LNG) from Russia to compensate for disruptions to Iranian and Gulf supplies.
At first glance, this suggests that Moscow has repositioned itself at the center of the energy chessboard. However, viewed in a broader geopolitical context, this picture resembles a complex equation that also carries long-term risks. Europe’s energy strategy is one of the areas where this complexity is most apparent.
Since 2022, the European Union has taken significant steps to reduce its dependence on Russian gas, dramatically cutting the volume of pipeline gas imports. That said, it does not appear possible to say that Russian LNG arriving at European ports has completely disappeared as of 2026. Several billion cubic meters of Russian LNG continue to enter the European market each month through countries such as Belgium, France, the Netherlands, and Spain. This dual structure points to an intermediate phase, one in which the official narrative emphasizes moving away from Russia, while in practice, a certain transitional period continues.
The attacks and the heightened vulnerability and crisis along the Strait of Hormuz are making this transitional phase even more tense. The rapid upward movement of gas prices in Europe during the first week is bringing to the fore, among the public and expert circles alike, the question of how faithful the timeline will remain regarding the goal of completely banning Russian LNG. On the one hand, the goal of reducing energy dependency is being preserved, while on the other, the price shock is emerging as a new source of pressure on industry, households, and budget balances. This dual pressure acts as a multiplier, reinforcing discussions of tactical flexibility in European energy strategy.
From Russia’s perspective, the question of what kind of long-term geopolitical positioning the increase in energy revenues will lead to gains importance. The gradual contraction of the European market is binding Moscow more firmly to the Asian axis. China and India are the leading actors in this equation. While this may mean market security and short-term revenue growth, a shrinking number of buyers increases the bargaining power of China and India. Russia’s energy card is thus becoming an instrument confined to a specific geography.
The recent war in the region is playing a role that simultaneously masks and accelerates this confinement. The current crisis may offer Moscow short-term financial relief through rising prices. Yet at the same time, it is opening up the concept of energy security in Europe and Asia for debate in increasingly forceful terms. Going forward, the motivation to reduce dependence on fossil fuels and geopolitically risky sources may intensify. This motivation also tends to take concrete form through steps such as long-term agreements with alternative suppliers, expanding LNG infrastructure, and accelerating renewable energy investments.
Taking all of this into account, Russia’s energy card provides a temporary advantage, but it contains two opposing dynamics. On one side lie rising budget revenues driven by the war’s pricing effect and expanding market demand. On the other hand, a strategic will is forming, hardened by intensifying energy security debates, that is gradually moving to substitute Russian energy. This intermediate state on the energy chessboard may expand Moscow’s room for maneuver in the short term, but in the years ahead, it may produce outcomes that confine it to an ever-narrower axis.
In conclusion, reading the energy dimension of this unfolding process in the Russian context requires accounting for this dual dynamic. Russia is deriving significant economic gains from higher prices and the strain on alternative suppliers in the current crisis. The crisis is serving as a catalyst, prompting Europe and Asia to rethink their energy infrastructure completely. For this reason, the current strength of the energy card presents a process in which today’s power moves forward, intertwined with new dependency relationships and shrinking margins for maneuver in the long-term geopolitical restructuring ahead.
[1] “Oil, Gas Prices Surge as Iran Conflict Disrupts Middle Eastern Flows”, EnergyNow, https://energynow.com/2026/03/brent-crude-jumps-to-over-82-wti-to-over-72-in-first-trading-as-iran-conflict-escalates-disrupts-shipping/, (Date Accessed: 09.03.2026).
[2] “Kremlin: Russian energy demand seeing ‘significant’ bump from Iran war”, Baird Maritime, https://www.bairdmaritime.com/shipping/tankers/kremlin-russian-energy-demand-seeing-significant-bump-from-iran-war, (Date Accessed: 09.03.2026).
[3] Alex Stezhensky, “Kremlin falls short of expectations as Russia’s oil and gas revenues plunge”, The New Voice of Ukraine, https://english.nv.ua/business/russia-s-oil-and-gas-revenues-plunge-24-5-in-sept-2025-as-kremlin-cuts-forecasts-50549878.html, (Date Accessed: 09.03.2026).
