The European Council President António Costa recently spoke to EU ambassadors in Brussels and delivered a plain geopolitical verdict. Costa stated that Russia stands as the sole winner in the fighting so far.
The Kremlin is converting regional instability into the capital for the campaign in Ukraine and is gaining from the tactical repositioning of Western military hardware.
The Strait of Hormuz is a fundamental artery for global energy andthe traffic practically stopped amid the Iran war. Oil prices surpassed $119 per barrel and reached heights that the world had not seen for years.
Russian Ural crude is now commanding a premium of $4 to $5.
Both Sides of the Coin
The Kremlin handled the state of affairs with its usual cold logic. Vladimir Putin expressed public grievances over the killing of Khamenei but he immediately directed Russian energy firms to capitalise on the changing market.
Putin has marketed Russian energy as a stable resource for European customers as the government simultaneously evaluates the leverage gained by withholding supplies from the same market. The coordinated actions position Russian exports as a necessary resource for energy-starved countries.
The intelligence sector discloses an elaborate strategy. Although U.S. officials reported that Russia has enhanced Iranian strike capabilities with sensitive targeting data, the Kremlin maintained a policy of tactical denial during a 10 March phone call with Donald Trump.
U.S. Special Envoy Steve Witkoff acknowledged the ambiguity of the situation by expressing a hope that such cooperation was not taking place. At a press conference held that same day, Donald Trump noted that Vladimir Putin seemed remarkably “impressed” by the American military operations in Iran.
Moscow’s Prize
EU Economics Commissioner Valdis Dombrovskis spoke out after Donald Trump suggested a relaxation of trade restrictions on certain oil producers to lower prices. Dombrovskis warned that such an action would provide a state-sponsored lifeline to the Russian war effort and described the potential policy transition as “self-defeating”.
The war triggered an opportunistic erosion of the long-standing Western sanctions architecture and granted Moscow the financial breathing room that officials spent years trying to restrict.
The Iran war has effectively restored the dominance of oil and gas revenues in the Russian federal budget. Russian oil and gas revenues, which had dwindled to 20% of the federal budget by 2025, reversed that trajectory overnight.
Saul Kavonic of MST Marquee observed that Russia is now securing nearly double the revenue per barrel for its oil cargoes compared to previous levels. Observers have noted that Moscow has already secured a massive financial windfall and estimated that tens of billions in additional revenue could flow into the Kremlin coffers if the blockages in the Gulf persist.
Ukraine Sends Shields
The transition in military focus spreads outside of energy revenues. Ukraine has prioritised the defence of the Gulf theatre by sending specialised drone interceptors and personnel to Jordan at the request of Washington.
The drones currently threatening Gulf infrastructure are the same models that have targeted Ukrainian cities for years. The Ukrainian interceptors cost only a small fraction of the expensive missiles being consumed by the U.S. and its allies. The redirection of resources means that Ukrainian air defences are now shielding foreign assets.
Moscow Eyes Iran’s Ruins
The future of Russian work in Iran is a high-stakes punt. The Moscow Times reported that major Russian transport and rail projects in the region now struggle with the threat of total insolvency due to the lack of regional stability.
Consequently, the economic strategy of Moscow in Iran is evolving into a pursuit of strategic concessions and mineral rights as a form of security.
The rationale behind the actions of the Kremlin is easy to see. A lengthy conflict in the Middle East secures strategic windfalls for Russia by stretching American resources and keeping European energy markets in a state of high anxiety.
Robert Person of the Foreign Policy Research Institute noted that the Kremlin views the war as a useful global distraction that keeps the United States occupied in a familiar regional struggle.Â
Mr. Putin has managed to secure a position of singular advantage by allowing the regional chaos to do the heavy lifting as he collects leverage from every direction.
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