How much has the Russian budget gained from Iran-war related higher oil prices?

In the wake of the joint attack by the United States and Israel against Iran, the Brent crude oil price spiked to $112 on 20 March, up from $69 on 25 February 2026, shortly before the war started. It stayed above $100 for most of March, April and May. 

The Urals crude oil price – the export price for Russian oil – increased even more: from $55/barrel on 25 February to $125 on 7 April. In January and February 2026, Urals crude sold at a discount of $10 to $14 against the Brent price, the result of Western sanctions against Russia. This differential disappeared after the war began. In late March and in April 2026, the Urals price was even higher than that of Brent.

The negative discount on Russian oil returned in the second week of May, but was moderate ($6-$7) until mid-June. Both Brent and Urals prices started to decline rapidly only after the US-Iran memorandum to end the war was announced on 14 June; since then the discount on Urals crude has increased again. By 2 July, the Brent price stood at $72 while the Urals price was $51.

How much did the Russian federal budget gain from the Iran war and higher oil prices? Data published by Russia’s finance ministry on 3 July showed that monthly hydrocarbon revenues accruing to the federal budget increased from 393.3 billion rubles (about €4.48 billion) in January to 432.3 billion rubles in February, 617.0 billion rubles in March and 855.6 billion rubles in April. Revenues then decreased to 678.9 billion rubles in May, and 683.6 billion rubles (about €7.8 billion) in June, reflecting the Urals price downward trend. Still, these are significantly higher amounts than in January-February 2026.

A comparison of Russia’s hydrocarbon revenues in March-June with averages of January-February shows windfall gains linked to the Iran conflict so far of 1,184 billion rubles (about €13.5 billion). This is approximately 0.5% of Russian nominal GDP, as forecast for 2026 by the International Monetary Fund.

On the other hand, federal hydrocarbon revenues for the first half of 2026 (3,660.7 billion rubles) were lower than in the same period of 2025 (4,734.7 billion rubles), when the average Urals price was higher than in the second half of 2025 and at the beginning of 2026. From this perspective, Russia’s additional hydrocarbon revenues from March to June 2026 can be considered a temporary reversal of their long-term declining trend.

Russia’s macroeconomic gains have not been limited to additional budget revenue. The IMF upgraded Russia’s real growth forecast from 0.8% in the January 2026 update of the World Economic Outlook to 1.1% in April. The average monthly exchange rate appreciated from 76.9 rubles to the dollar in February to 72.8 in May, helping to continue the disinflation trend. Annual CPI inflation amounted to 5.3% in May, the lowest level since August 2023. This allowed the Bank of Russia to cut its key interest rate to 14.25% in June 2026.

While the additional 0.5% of GDP of federal revenue and other macroeconomic benefits related to the Iran war are not a game changer, they provide some respite to the Russian budget, which faces increasing tensions because of war-related expenditure. At least temporarily, Russia’s fiscal room to continue the war of aggression against Ukraine has been increased.

It is hard to predict whether and when the Iran war will definitively end and how the global oil market will look in the second half of 2026. However, the important lesson of the last four months is that in the highly interconnected global economy, political and military actions in one geopolitical theatre can have unintended consequences for other regions and policies.

The author thanks Hans Geeroms, Ivo Maes and Nicolas Véron for their comments.