Russia's Windfall and Its Limits: How Moscow Is Exploiting the Hormuz Crisis Without Being Able to Capitalise on It
If there is one capital in the world where the news of the Strait of Hormuz closure was received with something approaching quiet satisfaction, it is Moscow. Russia is one of the world's largest oil exporters, and every dollar that Brent crude rises above its pre-crisis level is a dollar of additional revenue for a Kremlin that has been running an expensive war in Ukraine on a budget stretched to its limits. The crisis is, from a narrow fiscal perspective, an unexpected windfall. But the windfall has limits — and understanding those limits is essential to understanding what Russia will and will not do next.
The Revenue Arithmetic
Russia's 2026 federal budget was constructed around an oil price assumption of approximately $70 per barrel. With Brent crude trading at $120 and above since the crisis began, Russia is generating additional export revenue of roughly $50 per barrel on the approximately 4–5 million barrels per day it exports via routes not subject to G7 price caps — primarily through India, China, and Turkey. That represents additional revenue of $200–250 million per day, or roughly $6–7 billion per month. For a war that is consuming an estimated $300 million per day in military expenditure, this is a very significant financial buffer.
Why Russia Cannot Translate Windfall Into Power Projection
And yet Russia cannot meaningfully exploit the crisis beyond the passive benefit of higher revenue. The most fundamental constraint is military: after more than four years of attritional warfare in Ukraine, Russia's armed forces are in no position to project power into the Persian Gulf. The conflicts have consumed enormous quantities of equipment — tanks, artillery, armoured vehicles, and missiles — that defence industry production has struggled to replace. The military that could, in theory, have deployed a carrier battle group to the Gulf in 2010 does not exist in anything like that form in 2026.
Western sanctions have also created systemic fragilities in Russia's defence industrial base that the windfall revenue cannot quickly address. Microelectronics, precision manufacturing equipment, and advanced materials that flow into weapons systems all require supply chains that sanctions have disrupted. Russia has found partial workarounds through Chinese and Indian suppliers, but the bottlenecks are real and binding.
The Diplomatic Constraint
Russia's diplomatic position is also constrained in ways that limit its ability to actively support Iran. China — Russia's most important economic partner and the source of the financial and commercial relationships that have allowed Russia to partially absorb the impact of Western sanctions — has explicitly called for de-escalation. Open Russian support for Iran would embarrass Beijing and potentially jeopardise the relationship that Moscow cannot afford to lose. Russia can sell weapons to Iran through intermediaries, can provide diplomatic cover in the UN Security Council, and can offer rhetorical solidarity. Active military collaboration is a different matter.
The Strategic Comfort Zone
Russia's optimal position in the current crisis — and the position it appears to be occupying — is the role of interested spectator: financially benefiting from high oil prices, diplomatically supporting Iran just enough to maintain the relationship without drawing direct Western retaliation, and carefully watching how the United States and its allies manage a military and diplomatic crisis that stretches their resources and exposes their internal divisions. That the crisis has revealed serious fissures within NATO and between the U.S. and its European allies is, from Moscow's perspective, a strategic dividend worth at least as much as the oil price windfall. And unlike military intervention, watching costs nothing at all.