Israel-Iran crisis: 'Adrenaline shot' moment for Russian crude oil exports amid Strait of Hormuz, Red Sea threats

If the Iran-Israel conflict escalates to the point where Iran blocks the Strait of Hormuz and the Houthis tighten their grip on the Red Sea, the world’s oil arteries could effectively be choked off. Global supply chains would seize, energy prices would soar, and economies already strained by inflation could tip into crisis.

As the Middle East boils, one unexpected winner could emerge: Russia. With discounted oil already finding takers amid Western sanctions, Moscow could see a sudden surge in demand, boosting both its revenues and geopolitical sway.

Israel’s strike on Iran has sharply intensified a long-simmering conflict, raising fears of a broader regional war that could unleash economic aftershocks around the world.

Markets reacted instantly. Oil and gold prices spiked while the dollar strengthened, reflecting a rush toward safer assets. Brent crude surged over 10%, hitting its highest level since January before easing slightly.

The escalation has sparked concern among traders about disruptions to energy flows from the Middle East. The Strait of Hormuz — a vital chokepoint through which about a fifth of the world’s oil transits — is now in sharper focus. Any attempt by Iran to close it could upend the delivery of millions of barrels of oil per day, sending ripple effects through fuel prices, logistics costs, and consumer goods worldwide.

Compounding the risk are the Houthis in Yemen, whose attacks on Red Sea shipping since late 2023 have already forced global shipping firms to reroute vessels around Africa. The Red Sea normally feeds into the Suez Canal, a linchpin of global trade, handling around 30% of container traffic. But with container shipments in the region down 75%, companies are adding 10–14 days to routes and incurring steep costs.

Although the Houthis paused attacks on non-Israeli-linked vessels earlier in 2025, and the Suez Canal Authority urged a return to normal routes, the situation remains fragile. The latest Israeli strike threatens to shatter this tentative calm.

Against this backdrop, Russia stands to gain. Experts say “this could be the adrenaline shot” needed to lift Ural crude prices, which have dropped 14% year-on-year through May and recently hit their lowest point in over two years.

Western sanctions and the G7’s $60-per-barrel price cap following Russia-Ukraine war have cost Russia over $150 billion in three years, but haven’t delivered a knockout blow. A conflict-driven oil price spike could breathe new life into Moscow’s energy revenues, even as the EU readies its 18th sanctions package and the G7 mulls a lower $45 price ceiling.

This wouldn't be the first oil shock linked to Middle East unrest. Iran’s missile attacks on Israel last October pushed prices up nearly $10 a barrel — and many analysts warned then that a full-blown conflict would be a windfall for Moscow.