Russia has pocketed over $6bn of excess revenues in just the first two weeks of war in Iran, the Centre for Research on Energy and Clean Air (CREA) said in a report released on March 12.

Russia’s fossil fuel revenues have surged in the wake of the launch of Operation Epic Fury that set off the 2026 oil shock. Markets were suffering from whiplash after oil prices rose to $120 per barrel on March 9 as the global energy crisis gathered momentum, only to fall back to $85 again by the end of the day after Trump said the war was “pretty much over”.

The crisis is escalating as Gulf producers are rapidly running out of storage space and have already begun to cut production that will exacerbate the crisis which is expected to last at least a month, and probably longer.

The German non-profit Urgewald climate NGO, working with CREA, estimates that Russia has earned roughly €6bn from fossil fuel exports since Israeli and US strikes on Iran began on February 28 at a time when the Russian budget was under severe pressure due to the increasing effectiveness of new oil sanctions imposed by the Trump administration at the end of last year.

However, it already clear that Russia will be one of the biggest winners from the outbreak of war in the Middle East. Russia is positioning itself to take advantage of turmoil in global energy markets, Russian President Vladimir Putin told a cabinet meeting on March 10, and will boost oil exports to “friendly countries”. Russia exports some 5mn barrels of oil a day, a quarter of the 20 mbpd that has been taken off the market by the closure of the Straits of Hormuz on March 2.

According to CREA, Russia’s export revenues averaged about €510mn a day in the week following the strikes, around 14% higher than the daily average recorded in February.

Alexander Kirk, sanctions campaigner at Urgewald, said the surge highlights the structural dynamics of energy markets during geopolitical crises. “Russia is already profiting from this geopolitical crisis,” he said. “In the week after the strikes on Iran began, Russia’s fossil fuel export revenues rose to €510mn per day, 14% higher than February’s average.”

Kirk argued that such gains illustrate how volatility tends to favour large hydrocarbon exporters. “That is the reality of fossil fuel geopolitics,” he said in a press release sent by email to bne IntelliNews. “When markets panic, authoritarian exporters cash in. In less than two weeks, Russia has earned an estimated €6bn from fossil fuel exports, money that ultimately feeds the Kremlin’s war machine.”

The surge in revenues comes as Washington debates whether to ease restrictions on Russian oil sales further amid market turbulence triggered by the Iran crisis. US Treasury Secretary Scott Bessent last week issued a 30-day waiver allowing India to purchase Russian oil already at sea, describing it as a limited measure designed to stabilise supply. However, the 20mn barrels of oil currently stored on Russian tankers is only enough to supply India with four days worth of oil and the Trump administration is mulling further easing sanctions to meet soaring global demand.

For campaigners, the discussion about broader sanctions relief risks sending the wrong signal. “Easing sanctions now would not stabilise markets,” Kirk said. “What it would do is allow Russia to sell the same oil for a far better price.”

The International Energy Agency proposed the largest ever release of oil reserves on March 10 to further calm markets that has already seen the price of oil fall from a peak of $120 at the start of this week to $87 as of the time of writing.

But Russia has been a big winner in another way: the discounts on Russia Urals blend over the benchmark Brent blend of up to $20 have disappeared and as of March 11 Urals was trading over $100 at a $13 premium to Brent for the first time since the invasion of Ukraine four year ago, adding to the Kremlin’s earnings. Last week, Putin told Indian Prime Minister Narendra Modi, “Now its business, not friendship,” and Russia would no longer offer India the deep discounts that New Delhi has enjoyed since Russia rerouted its exports of Asia in 2022 following the EU’s sanctions on Russian oil imports.

According to Kirk, lifting sanctions constraints will narrow the discount and significantly increase Moscow’s revenues without requiring any increase in production.

“A rollback closes that gap overnight and hands the Kremlin a revenue boost worth billions, at the very moment that pressure is starting to bite,” he said.

Kirk framed the debate in stark terms for policymakers. “This is a political choice,” he said. “Governments can hold the line on sanctions, or they can signal that if energy prices rise high enough, the West will always find a reason to blink.”

In parallel to the oil shocks, a gas crisis is rapidly unfolding in Europe as the Gulf, led by Qatar, also supplies about a fifth of global LNG supplies. 

International Energy Agency executive director Fatih Birol warned Reuters on March 6 that returning to Russian gas would be “economically and politically wrong”, even amid current LNG market turbulence. The same logic applies to Russian oil sanctions.

"The current crisis in the Middle East has led to questions in some quarters about whether to go back to Russia ​or not," Birol told reporters following a meeting between European Commission President ​Ursula von der Leyen and EU commissioners on global energy ⁠markets. "One of Europe's historical mistakes was the over-reliance of its energy sources on one single country, Russia.”

EC officials and analysts acknowledge there is no quick fix, while EU governments are split on how to respond. Europe remains hooked on Russian gas and despite a threat to ban Russian gas imports from January 1, 2027, the EU actually increased Russian LNG imports last year due to the extremely cold winter.

Again to capitalise on the chaos in the energy markets, Putin is proposing to turn the tables on Europe and ban Russian exports of gas to the EU immediately and sell the surplus to Asia instead which will only inflame gas prices that have already doubled since Operation Epic Fury began in just the first week of war.