Iran war has driven surge in global demand for Russian energy, says Kremlin

The conflict, now in its seventh day, has left the Strait of Hormuz nearly shut, cutting countries around the world off from about a fifth of global oil and liquefied natural gas supplies

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 in recent years 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 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. 

 

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

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

Traders are selling Russian Urals crude to India at a $4 to $5 a barrel premium to Brent on a delivered basis for March and early-April arrival, three sources told Reuters. 

The grade's discount to Brent in the Russian Baltic Sea port of Primorsk narrowed by some $5 per barrel to around $20 per barrel on the FOB (free on board) basis, which does not take into account transportation and some other costs for the seller, Reuters calculations showed on Friday. 

"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. 

WEST CUTTING OFF RUSSIAN OIL AND GAS 

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. 

After Russia launched its war against Ukraine in February 2022, the West moved quickly to cut its reliance on Russian oil and gas, the backbone of Moscow's economy. 

The European Union has imposed various import and export restrictions on several products, resulting in a 61 per cent decline in exports to Russia and a 90 per cent drop in imports from Russia between early 2022 and the end of 2025. 

Russia's pipeline gas exports to Europe sank by 44 per cent in 2025 to their lowest since the mid-1970s following the closure of a major transit route via Ukraine, and as the EU phases out fossil fuel imports from Russia. 

Brussels has also worked out a plan to stop Russian LNG imports by end-2026 and pipeline gas by September 30, 2027, while President Vladimir Putin has suggested that Russia might cut LNG and gas exports to Europe itself. 

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