BERLIN, March 12 (Reuters Breakingviews) - Russia is reaping a hefty reward from the loss of its influence in the Middle East. The bombing of Iran by the U.S. ​and Israel has boosted oil prices just as Moscow’s finances are crumbling. That will give President Vladimir Putin some ‌financial firepower to fund his war in Ukraine and postpone painful fiscal decisions.

The Russian government built its 2026 budget based on Urals crude trading at $59 a barrel. That was a realistic forecast — and just about the price its oil was trading at the end of February. But in the ​10 days since the war in the Middle East erupted it has shot up to more than $80. That ​hands Russian President Vladimir Putin a helpful windfall given taxes and levies on oil and gas account ⁠for about 20%, opens new tab of the central government’s revenue.

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The boost is also timely. Oil and gas receipts were down 47%, opens new tab in the first ​two months of 2026 compared to the same period in 2025. The Kremlin had already exhausted its planned annual deficit by ​the end of February.

If the Russian government abides by its own fiscal rules, the windfall won’t flow into the budget. Anything above the $59 threshold must be saved in the country’s National Wealth Fund. But the fund acts as a rainy-day facility that can cover budget shortfalls — the situation Russia ​is in now. The liquid assets of the fund (held in foreign currency or gold) have already been depleted from $150 billion to $50 ​billion since the war started.

If the prices of oil and gas remain at their current level for a few months, Russia can expect ‌a significant ⁠financial boost. According to an estimate, opens new tab from investment banker Yevgeniy Kogan, a $1 change in the Urals price triggers a variation of up to $1.9 billion in government revenue. Maintained over a whole year, higher oil prices could then deliver some $40 billion in extra revenue to Moscow.

And Putin may also sell more oil and gas. Donald Trump last week granted India a 30-day waiver from Russian oil sanctions, ​and the U.S. president hinted ​he could go further to ⁠make up for the impact of the Strait of Hormuz blockade on world oil markets.

Moscow refrained from condemning the U.S. when it launched its recent Iran bombing campaign. It already lost a ​key ally in 2024 in the region with the end of Syria’s Assad regime. Many ​governments in the ⁠Middle East and beyond may soon wonder what is the point of having Russia as a supposed ally. But Putin has his consolation prize – an unexpected windfall to fund his war.

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Context News

• Russia’s Urals crude oil was trading at around $82 a barrel ⁠on March ​11, having spiked above $100 two days before on fears of prolonged hostilities ​in Iran.
• It was trading at $93 a barrel right before the start of Russia’s invasion of Ukraine in February 2022 and sank as low as $49 a barrel ​in early January 2026.

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Editing by Aimee Donnellan; Production by Streisand Neto

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Pierre Briancon

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Pierre Briancon is a Breakingviews columnist, writing on European business and economics. He was previously a writer or editor at Barron’s, Politico, and Breakingviews for a first stint as Paris correspondent and European editor. For the first part of his career he was a foreign correspondent and editor at Libération, the French newspaper. He was also an economics columnist for Le Monde and for French public radio.

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