Three Weeks of the US-Iran War: Who's Making Money and Who's Paying the Bill?

On February 28, the United States and Israel launched a military strike against Iran. Iran responded by blocking the Strait of Hormuz, cutting off the daily transit of 20 million barrels of oil worldwide. Three weeks later, IEA Director Fatih Birol provided a figure on March 23 at the Australian National Press Club: the global daily oil supply loss caused by this war is 11 million barrels.

This number exceeds the combined losses of the 1973 oil embargo and the 1979 Iranian Revolution crises.

More than 40 energy infrastructure sites across nine Middle Eastern countries have been damaged to varying degrees. Data from the IEA during the same period shows that global natural gas supply losses reached 140 billion cubic meters, nearly twice the European natural gas losses during the Russia-Ukraine conflict (75 billion cubic meters). In just three weeks, the quantitative impact on energy markets from this conflict has surpassed all of the 1970s.

But supply loss is only half the story. The other half is that this crisis has clear beneficiaries.

Putin’s Unexpected Gain

Before the Iran war began, Ural crude oil traded at less than $60 per barrel. This price had been locked in for nearly three years as a direct result of Western sanctions. After the Russia-Ukraine war broke out, Western countries imposed a price cap on Russian oil, maintaining a long-term discount of $30 to $40 between Ural crude and the international benchmark Brent. This discount was the most direct signal that sanctions were working.

The Iran war changed all that. After the Strait of Hormuz was blocked, a huge gap appeared in the global oil market, forcing buyers to seek alternative supplies. According to data from the Center for Energy and Clean Air Research (CREA), in the first two weeks of March, Russia’s fossil fuel exports generated a total revenue of €7.7 billion, averaging €513 million per day, an 8.7% increase from €472 million in February. Of this, daily oil export revenue was €372 million, earning an extra €672 million (about $777 million) over two weeks.

Ural crude oil prices rose from below $60 to about $90 within three weeks, an increase of nearly 80%. According to Al Jazeera, energy analyst George Voloshin pointed out that Brent also rose from about $65 to over $110 during the same period, but the key isn’t the absolute price, rather the spread between the two. The discount between Ural and Brent narrowed sharply from about $40 before the war. Moscow Times reported on March 16 that Ural crude delivered to India briefly traded at a premium over Brent, something that had never happened since sanctions took effect.

In other words, the economic wall built by three years of Western sanctions was largely dismantled by just three weeks of the Iran war.

On March 12, the Trump administration announced a 30-day sanctions waiver allowing countries to purchase Russian oil in transit. Treasury Secretary Scott Bessent said this would release about 140 million barrels of supply. However, analysts generally believe that the restrictions on “not bringing significant financial benefits” in the waiver are nearly impossible to enforce. Meanwhile, the IEA announced the release of 400 million barrels from strategic reserves, the largest in history. This waiver will expire on April 11, and the market will face a new round of uncertainty.

India is the most direct actor. CREA data shows that in the first two weeks of March, India purchased Russian fossil fuels worth €1.3 billion, averaging €89 million per day, a 48% increase from €60 million daily in February. Al Jazeera confirmed that at least seven oil tankers originally heading to China rerouted to India, including the vessel Aqua Titan, which arrived at an Indian port on March 21. While the world is anxious about oil prices, oil trade between Moscow and New Delhi is accelerating.

Who Is Paying the Bill?

Both supply losses and increased revenues on the beneficiary side will ultimately impact consumers. American consumers are the most directly affected.

AAA data shows that the national average gasoline price in the U.S. rose from $2.98 before the war to $3.96 on March 23, a 33% increase. California’s average has reached $5.56, while Kansas is at least $3.23. Diesel prices hit $5.07, the highest since 2022.

Fortune reports that this round of oil price increases has wiped out the tax refunds recently received by American households.

The airline industry was among the first to feel the impact. Platts data shows jet fuel prices in the U.S. increased over 60% in three weeks, with some areas doubling. United Airlines became the first major U.S. airline to announce capacity cuts. CEO Scott Kirby stated in an internal memo that the company is preparing for oil prices to reach $175 per barrel, which would increase annual fuel costs by about $11 billion—more than twice the company’s “best year” profit. United plans to cut 5% of flights in Q2 and Q3.

The impact is spreading globally. CNBC reported on March 21 that Delta Air Lines also warned of potential capacity reductions. Euronews reported that airlines such as Australia’s Qantas, Scandinavian Airlines, and Thai International have raised prices, while Air New Zealand canceled over 1,000 flights.

Even the gig economy is affected. The Philadelphia Inquirer reported on March 23 that DoorDash is providing drivers with weekly fuel subsidies of $5 to $15 and 10% cashback on refueling to offset reduced orders caused by rising fuel prices. When a food delivery platform has to pay the price of the Middle East war, the length of the transmission chain of impacts needs no further explanation.

Three weeks into the Iran war, the world is losing 11 million barrels of oil daily, Russia has earned nearly $800 million more in 15 days, and U.S. consumers are paying a third more for gasoline. After the sanctions waiver expires on April 11, this transmission chain will continue to extend.