Russia Reaps Windfall as Strait of Hormuz Disruption Boosts Oil Revenue

Russia is experiencing a significant surge in oil revenue, estimated between $1.3 billion and $1.9 billion, due to disruptions in Middle East oil shipments caused by the widening military conflict and the near-closure of the Strait of Hormuz. This has led to increased demand for Russian crude, particularly from India and China, and a softening of previous sanctions pressure from the United States.

India Increases Russian Oil Imports

India’s purchases of Russian crude have risen by approximately 50% in March, reaching around 1.5 million barrels per day (bpd) compared to 1.04 million bpd in February. India, the world’s third-largest crude importer, relies on imports for about 88% of its oil needs, consuming nearly 5.8 million barrels per day. Traditionally, 2.5-2.7 million barrels were sourced from Middle Eastern producers via the Strait of Hormuz [Indian Express].

The disruptions to shipments through the Strait of Hormuz, which handles roughly 55% of India’s cooking gas (LPG) imports and 30% of liquefied natural gas supplies, have prompted Indian refiners to seek alternative sources, with Russian barrels filling the supply gap [Indian Express].

US Softens Stance on Russian Oil

The situation has led to a shift in the United States’ approach, with Washington appearing more accepting of increased Indian consumption of Russian crude, even from sanctioned entities [Indian Express]. There have also been indications of potential easing of sanctions, with former President Trump mentioning the possibility of “taking sanctions off” some unnamed countries to reduce prices [Indian Express].

Financial Implications for Russia

Analysts estimate that Russia could receive an additional $3.3 billion to $4.9 billion in revenue by the end of March, based on Urals crude prices averaging $70-$80 per barrel. This represents a significant reversal of fortune for Moscow, which had been facing falling oil prices and reduced sales prior to the recent conflict [Indian Express].

Every $10 increase in the average monthly price per barrel of oil generates an additional $2.8 billion in revenue for Russian oil exporters, with the state receiving $1.63 billion through taxation [Indian Express].

Current Market Dynamics

As of mid-March 2026, Indian imports of Russian oil are running at 1.5 million b/d, a 50% increase from early February. Kpler analysts predict that total Russian crude arrivals for the full month could reach close to 2 million barrels per day [Indian Express]. Shipment tracking data indicates a “substantial amount” of Russian crude is currently en route to Indian ports [Indian Express].

The disruption to the Strait of Hormuz is estimated to remove approximately 60 million tonnes of crude oil and 7 million tonnes of LNG from the market each month [MUFG Research].

Iran Allows India-Flagged Tankers Passage

Recent reports indicate that Iran will allow India-flagged tankers to pass through the Strait of Hormuz [Reuters].