Western sanctions had squeezed Russia’s oil revenues to their lowest since the pandemic. Then the US bombed Iran—and within two weeks, reversed months of that pressure.
Russia earned €7.7 billion ($8.3 billion) from fossil fuel exports between 1 and 15 March, according to the Centre for Research on Energy and Clean Air (CREA), as soaring oil prices and a US sanctions waiver channeled fresh revenue to the Kremlin—money that funds its ongoing war against Ukraine.
Brent crude traded above $119 a barrel on 19 March.
Daily fossil fuel earnings reached €513 million ($554 million), up from €492 million ($531 million) in February, with fossil fuel revenues rising 14% month-on-month. Brent crude traded above $119 a barrel on 19 March.
Volodymyr Zelenskyy told CNN on 15 March that lifting sanctions “will only help Russia,” warning that Moscow could use the windfall to offset its budget shortfall.
India’s sharp reversal
India is where the reversal is sharpest. Russia’s crude imports there fell 19% in February—though Russia remained India’s largest oil supplier that month.
After Iran halted shipping through the Strait of Hormuz—through which a fifth of the world’s seaborne oil flows—Russian shipments to India rebounded to around 1.8 million barrels a day and could reach between 2 and 2.2 million in March, Kpler analyst Sumit Ritolia projected.
At the end of February, approximately €2.3 billion ($2.5 billion) worth of Russian crude sat at sea without a buyer. The US waiver effectively unlocked those stranded cargoes for Indian and Chinese refiners—but the revenue boost goes beyond simply selling unsold oil.
India and China together account for around 75% of Russia’s oil revenues.
As global prices rise, the discount on Russian crude narrows, increasing the tax Moscow can apply per barrel and boosting its revenues. India purchased about €1.3 billion ($1.4 billion) in Russian fossil fuels in the first half of March alone—€89 million ($96 million) a day, up from €60 million ($65 million) in February. India and China together account for around 75% of Russia’s oil revenues.
The Wall Street Journal reported that Etibar Eyyub—Moscow’s key shadow fleet operator—resumed actively selling Russian crude to buyers in India and China after months of stranded cargoes.
A transatlantic rift
Washington’s response widened a transatlantic rift. The US Treasury issued a 30-day waiver on 12 March, permitting the purchase of Russian crude stranded at sea—reversing months of pressure on India to stop buying sanctioned Russian oil. Treasury Secretary Scott Bessent wrote on X that the measure “will not provide significant financial benefit to the Russian government.”
At the same time, Hungary’s Viktor Orbán vetoed the EU’s 20th sanctions package against Russia over energy policy.
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European Commission President Ursula von der Leyen, German Chancellor Friedrich Merz, and French President Emmanuel Macron all called to hold the sanctions line, Euronews reported.
At the same time, Hungary’s Viktor Orbán vetoed the EU’s 20th sanctions package against Russia over energy policy. The EU still imports around €50 million ($54 million) a day in Russian fossil fuels, mainly pipeline gas that remains exempt from sanctions.
Western sanctions, Ukrainian strikes on refineries, and a strong ruble had halved Moscow’s Q1 oil revenues compared to the same period last year.
Some of the damage to Russia’s accounts is already locked in. Euromaidan Press reported that Western sanctions, Ukrainian strikes on refineries, and a strong ruble had halved Moscow’s Q1 oil revenues compared to the same period last year, and Q1 closes on 31 March regardless of what happens next.
The Finance Ministry publishes the official figures on 3 April. Whether the Iran windfall ultimately offsets that damage depends on whether Washington’s sanctions relief outlasts the quarter.
