• The Kremlin asserts that the US-Israeli war with Iran has created turmoil in the global gas market, paradoxically increasing demand for Russian energy exports due to supply disruptions.
  • The near-closure of the Strait of Hormuz has halted about 20% of world oil and LNG flows, with Qatar suspending production and other Gulf facilities hit, causing energy prices to surge—European gas futures are up 50% in a week.
  • Russia, the world's second-largest natural gas exporter, sees a rebound in oil and gas income from higher prices, despite a 25% drop last year due to Ukraine sanctions, as it pivots to Asian markets amid EU tensions.

Russia's government has highlighted how the ongoing conflict in Iran is reshaping global energy dynamics, with the Kremlin stating that the war has thrown the gas market into disarray while unexpectedly bolstering demand for its own exports. This stems from the near-closure of the Strait of Hormuz, a critical chokepoint that has halted approximately 20% of global oil and LNG flows, according to people familiar with the matter. Qatar has suspended production, and other Gulf facilities have been impacted, leading to a sharp spike in energy prices—European gas futures have surged 50% in just one week, reflecting the immediate strain on supplies.

Efforts to stabilize the market have hit a snag, with the conflict now in its third week since US-Israel strikes began around February 28, 2026. Without a swift de-escalation, experts predict prolonged shortages, even post-ceasefire, as Qatar's recovery is expected to be slow. In the short term, this turmoil risks weeks or months of supply disruptions, pushing oil potentially to $150 per barrel and gas to $40 per MMBtu, which has already disrupted shipping and production from Qatar to Iraq. In the US, gasoline prices exceed $3 per gallon, pressuring the Trump administration ahead of midterms, while India is rationing industrial gas, straining import-reliant industries.

Paradoxically, this chaos has boosted demand for Russian energy exports, according to Kremlin sources. Russia, with Gazprom (GAZP.ME) as its dominant state-controlled firm, reported recent financials showing oil and gas income down about 25% last year due to Ukraine sanctions but now rebounding from higher prices. No major leadership changes have been reported, with Putin driving policy, including threats of an early gas cutoff to Europe as the EU faces an incoming Russian gas ban in late 2027. "The market here is not as competitive as other markets," a source close to Russian energy circles noted, echoing sentiments that Russia can capitalize on the situation to gain market share in Asia.

Political context adds another layer, with Trump ordering strikes that killed Iran's Khamenei, escalating tensions, and the EU dreading eased US sanctions on Russian energy. Putin has floated LNG diversion from Europe, and EU states are scrambling for alternatives, such as accelerating US LNG imports. In related developments, Saudi refineries are offline, and broader Gulf strikes have hit Iraq and Qatar, while Trump's team plans oil cost strategies. Attempts to reach out for comments from EU officials were unsuccessful, but industry insiders suggest that without a deal, the situation could force further market adjustments.

Looking ahead, the long-term outlook favors Russia pivoting to Asia, with US waivers for stranded Russian oil to India already in play. Historical parallels to the 2019 Iran tanker attacks but on a larger scale highlight the risks, and societal impacts include higher fuel prices straining US and EU consumers amid winter stockpile depletions. Public debate focuses on election risks for Republicans and EU energy security, with some corrections noted: earlier reports of immediate EU sanctions easing were overstated, as negotiations continue. Ultimately, the Kremlin's stance underscores how global conflicts can reshape energy flows, with Russia positioned to benefit from the current turmoil, even as markets brace for more volatility.