The war in the Middle East quickly turned into a financial win for Russia, with Reuters calculations showing Russia’s biggest single oil tax will roughly double in April as the energy shock triggered by US and Israeli strikes on Iran pushed global crude prices above $100 a barrel and tightened demand for Russian exports.
Russia’s mineral extraction tax on oil output alone is expected to rise to about 700 billion rubles, or roughly $9 billion, in April from 327 billion rubles in March. Reuters reported that would leave the April take up about 10% from the same month last year.
That jump was driven by price, not just volume. The average price of Russia’s Urals crude used for taxation rose to $77 per barrel in March, the highest since October 2023. That was up 73% from $44.59 in February and well above the $59 per barrel level assumed in Russia’s 2026 state budget.
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After the US and Israeli airstrikes on Iran at the end of February, Iran effectively shut the Strait of Hormuz, a route that normally carries about one-fifth of global oil and LNG flows. That shock sent Brent futures well above $100 per barrel and turned Russian barrels into a more attractive substitute in a suddenly tighter market.
Reuters noted that crude oil export duty has been zeroed out since the start of 2024 under Russia’s longer-running tax reform, meaning the current windfall is being captured mainly through production-based taxation rather than old export levies.
Russia’s benefit was not limited to oil pricing. Prime Minister Mikhail Mishustin said the Middle East disruption created “new opportunities” to improve the financial position of export-oriented industries and bring in additional budget revenue. He said Russia has capacity to increase overseas shipments of resources now in short supply because of the crisis, including food-related supplies.
It bodes well for Moscow that the war also shocked disruptions in global supplies of urea, sulphur, and helium, all commodities where Russia is a major producer. Russia is the world’s second-largest oil exporter, the largest wheat exporter, and a major producer and exporter of fertilizers.
However, Russia still ran a budget deficit of 4.58 trillion rubles, or 1.9% of GDP, in the first three months of 2026, showing that even a sharp April revenue boost will not erase wider fiscal pressure.
On top of that, Ukraine’s attacks on Russian energy infrastructure continue to pose risks of lower earnings and future oil production cuts, which could cap the upside from higher prices. Russia has also tried to shield its home market from the same shock that improved its export economics, with Mishustin pointing to bans on gasoline and nitrogen fertilizer exports as measures meant to protect domestic consumers from external price spikes.
Still, Russia budgeted for 7.9 trillion rubles from the mineral extraction tax for all of 2026, and the Iran war has suddenly made that target easier to defend by lifting Urals prices, increasing interest in Russian energy, and creating fresh openings in commodities strained by Middle East disruption.
The longer the shock persists, the more likely Moscow is to keep monetizing a conflict that has damaged much of the rest of the global economy.
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