A war in Iran could bring the Russian budget up to $250 billion in additional revenue. These funds would allow the Kremlin to finance its aggression against Ukraine much more intensively than it does now.
Points of attention
- Russia could benefit up to $250 billion in additional revenue from a war in Iran, enabling more intensive financing of aggression against Ukraine.
- The scenarios modeled by analysts show that rising oil prices and energy exports are key sources of surplus profits for the Russian Federation.
Russia could receive $250 billion from war in Iran
Analysts from the KSE Institute at the Kyiv School of Economics modeled three scenarios for the development of events depending on the duration of the conflict.
"Quick War" scenario (by mid-April). Even with a short conflict, Russia would earn an additional $84 billion. Oil prices would jump to $100 per barrel, and the Kremlin's state revenues would increase by $45 billion.
Scenario "Protracted conflict" (until the end of May). A temporary rise in oil prices to $140 will bring Russia an additional $161.3 billion. Total revenues from energy exports will increase by 135% compared to pre-war forecasts.
"Great War" scenario (by the end of September). This is the worst-case scenario, in which prices could reach $150-200 per barrel. Russia will receive an excess profit of $252.4 billion. This is more than Russia earned in 2022, and tax revenues to the aggressor's budget will increase almost fourfold.
Experts emphasize the critical importance of stability in the region for the security of all of Europe.
From the point of view of European security policy, the passage through the Strait of Hormuz must be restored as soon as possible, no matter what, notes co-author of the study, director of the KSE Center for Geoeconomics Benjamin Hilgenstock.
Economists emphasize that Moscow's growing revenues directly threaten Ukraine, as these resources allow Russia to continue its aggression.
The Kremlin's projected surplus profits ($250 billion) significantly exceed the amount of Western aid to Kyiv.
Military action between the US and Israel in the Persian Gulf will have significant implications for another conflict much closer to Europe: the war in Ukraine.
