Russia gets export boost from Iran war as price of oil to India surges

By Vladimir Soldatkin and Dmitry Antonov

MOSCOW, March 6 (Reuters) - The war in Iran has fuelled a significant bump in demand for Russian oil and gas, the Kremlin said on Friday, boosting exports which have been battered by sanctions linked to Russia's war in Ukraine.

The Iran conflict, now in its seventh day, has left the Strait of Hormuz, a critical shipping chokepoint, all but shut, cutting countries off from a fifth of global oil and liquefied natural gas (LNG) supplies.

"We are seeing a significant increase in demand for Russian energy resources in connection with the war in Iran," Kremlin spokesman Dmitry Peskov told reporters on Friday, saying Russia "remains a reliable supplier" of both oil and gas, including LNG.

Underlining the boost to Russian revenue, traders said on Friday that Russian flagship Urals oil delivered to Indian ports was selling at a premium to Brent crude, the international benchmark, for the first time ever.

The Russian oil, which was selling at a discount of $10 to $13 before the U.S. and Israel launched attacks on Iran on February 28, is now commanding a premium of $4-5 over Brent upon delivery to India in March or early April.

The leap reflects a sharp rise in demand for Russian oil from Indian refiners who have suddenly been cut off from supplies of Middle East crude.

On Thursday, the U.S. Treasury issued a 30‑day waiver allowing India to buy Russian oil currently stuck at sea, following months of U.S. pressure on New Delhi not to purchase Russian barrels.

Peskov declined to disclose possible volumes that could be shipped to India under the waiver.

Since the start of the conflict in Ukraine in 2022, Russia has been forced to sell its oil at a discount because of Western sanctions, including price caps on Russian crude, aimed at curbing its budget revenue and hampering its ability to wage the war.

The latest outbreak of war in the Middle East has pushed oil prices higher worldwide, but Russia has gained disproportionately.

While outright prices for Brent rose 25% in the past week, Russian Urals oil eclipsed those gains - effectively rising 50% to $68.6 from $45.7 per barrel on a free on board basis in the Baltic port of Primorsk.

"Thus the conflict in the Strait of Hormuz is creating favourable conditions for the growth of Russia's revenues from energy exports," said Igor Yushkov, an analyst at Russia's government-run Financial University.

The price moves show how Russia is emerging as a short-term financial winner from the war in Iran, even if it risks losing geopolitical influence in the longer term.

Iran's Supreme Leader Ayatollah Ali Khamenei, who was killed on the first day of Israeli and U.S. strikes, was the third Russian ally to be removed from power in the space of a little over a year, after Syria's President Bashar al-Assad was toppled by Islamist rebels in December 2024 and Venezuelan President Nicolas Maduro was captured by U.S. special forces in January.

WEST CUTS OFF RUSSIAN OIL AND GAS

The Iran war has also roiled markets for gas, of which Russia is a major producer. Qatar halted its production of LNG on Monday because of Iranian strikes on Gulf countries in response to the U.S. and Israeli attacks.

Slovakia's national gas company, SPP, said on Friday it has amended its long-term contract with Russia's Gazprom GAZP.MM to align it with European regulations and continue to import Russian gas, after talks that sources said were intended to raise volumes before an EU ban on Russian gas kicks in late next year.

Before the Ukraine war, Europe was buying more than 40% of its gas from Russia, but combined sales of pipeline gas and LNG from Russia accounted for only 13% of total EU imports in 2025.

The EU plans to stop Russian LNG imports by end-2026 and pipeline gas by September 30, 2027, but President Vladimir Putin suggested this week that Russia might pre-empt that by cutting those exports off now.

Russian news outlets quoted Deputy Prime Minister Alexander Novak as saying that he had discussed with domestic energy companies the possibility of redirecting Russian LNG supplies from Europe to countries including India, Thailand, China and the Philippines.

"The EU's energy strategy – premised on the idea that Russian volumes could be permanently replaced by a combination of U.S., Qatari and other LNG, plus accelerated renewables – is now in serious question," said Christopher Weafer, an analyst at the Macro-Advisory consultancy.

International Energy Agency Executive Director Fatih Birol said on Friday that looking to Russia for gas supplies would be economically and politically wrong, given incoming global LNG supply.