The Peter Zeihan Podcast Series - Winners and Losers of the Iran War: Ukraine and Russia || Peter Zeihan

Episode Date: April 13, 2026

The Iran war has slashed oil exports from the Persian Gulf, creating a global supply shortage that's just starting to hit markets. As prices are driven up and broader economic impacts unfold, winners and losers will begin to emerge. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://bit.ly/4meB4U1

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Today we're going to dive into our open-ended series on the impacts of the Iran War and everybody else. We've talked about the United States at length and the Persian Gulf countries, of course. But what about everyone else? The region used to export 22 million barrels of crew today. It is now down to probably something between 10 and 12. So we're already looking at a shortage of 400 to 450 million barrels that haven't gotten out. A lot of that shut in is going to remain shut in for, assuming no additional damage. It'll remain shut in a minimum of another nine months after the gun stopped firing.

And in the case of some of the Iraqi production, probably well over two years. These aren't shale wells where you can just turn them on and off. Anyway, that has a lot of, in fact, on a lot of people. We are only in the preliminary days of seeing oil prices go up. It was only last week that the last of the oil tankers pre-war from the Persian Gulf made it to Northeast Asia, and it'll be this week that the last make it to Western Europe. So what it was a failure in throughput is now becoming a failure in supply, and we're going to see that impact all kinds of things.

So let's start with the former Soviet Union, specifically Russia. and Ukraine. In the opening days of the war, the conventional wisdom was twofold. Number one, there's no way that Ukraine comes out of this in a better position. The Western world, the whole world, is going to be distracted by what's going on in the Persian Gulf, which for most countries is more significant than what happens in the Russian near abroad. The United States is going to be diverting its weapon system, most notably its missile interceptors, to its own needs in theater rather than sending them to Ukraine. And on the flip side, Russia's going to make mad bank. Oil prices had been moderate until the war started. Now they're regularly over $100

a barrel. And if you consider that the break-even cost for a lot of Russian fields are between $30 and $50 a barrel, and they went from selling at $60 to $100, you know, you've seen the profit for Russian oil sales increased by a factor of five or more. almost overnight. And that cash coming in is obviously going to remake what Russia can do with the war. Most of their equipment comes from China, but the China insists on hard currency payments, and that requires oil sales. That was a conventional wisdom. And there's nothing wrong with that. But now that we're five weeks in, we're seeing a much more nuanced picture with a lot of unexpected upsides and downsides for both sides. Let's start with the Russians. The Russians have been actively

providing intelligence and techniques and hardware to the Iranian government to target the United States forces in region. While Donald Trump remains firmly in Putin's pocket, that is drastically adjusting things in the Defense Department and on Capitol Hill, where we're seeing significant unrest in the United States with Donald Trump's policies. In a way, They can't help the Russians long term. More importantly, the Russians and the Iranians are not the only ones with drones. And during the war, the Ukrainians have showcased a new set of hardware with a little bit longer range and have used it to completely destroy the export capacity of Russian oil exports from the Baltic Sea.

It's conservatively removing a million and a half barrels a day of exports, maybe up to 2 million, because the Russians can't really redirect. They don't have a backup pipeline system. And so what was originally this big windfall has turned into a structural loss for them in terms of oil exports. They're still earning more money overall. But once the Ukrainians are done with the St. Petersburg region, they're just going to turn those drones onto the next oil-producing and transiting system. And we may not have any meaningful Russian exports from either the Baltic or the Black Sea. within three months. We're that close.

Second, Ukraine itself. The year that the Ukrainians have had to basically operate without American assistance, they've used to great effect in innovating into the drone space, specifically encounter drone technology. They've got something called the Brave One, which can fit into a duffel bag and has limited range, not a great success rate,

maybe 50%, but it only costs $2,000 to $3,000 to make versus 30 to 50,000 for a Shahed versus 4 million for a pack three. So Zelensky in the last couple of weeks has been all over the Persian Gulf signing deals specifically with Kuwait and Qatar and United Arab Emirates and Saudi Arabia. Each multi-billion dollar deals to invest in drone production. The Ukrainian problem this last year hasn't been innovation. It's having the cash necessary to buy all the materials to make it. probably half of the industrial plant that they've expanded in Ukraine in the last year is not being used

because they don't have the money. Well, say what you will about the Gulf firms. Money is not the limiting factor. So we're going to be seeing money pouring into these facilities in Ukraine, which is going to drastically increase the defense of Ukraine from the Russians. At the same time, they'll be exporting drones to the Gulf states, and the Gulf states will be building their own counter-dron factories. So we're talking about a whole number of countries that five years ago, no.

no one really considered to be at the forefront of military tech, all of a sudden, at the forefront of military tech in a way that the United States can't participate in and isn't benefiting from. So we've seen Ukraine and Russia get weird ups and downs in ways that were completely unexpected just a few weeks ago. But perhaps the biggest impact of this is because the Russians are so actively assisting the Iranians is that all of the Arabs of the Persian Gulf are noodling over what's next for them vis-a-vis the Russians and the United States. And if you remember back to roughly

1985, when Reagan really started pushing hard on the Soviet Union, that was the year that the Saudis decided to drastically open up oil production in order to flood the market and bankrupt what was then the Soviet Union. We now have the beginnings of a second generation of some sort of alliance like that, but instead of the United States, it's the Europeans. Instead of NATO, it's Ukraine. And so we've got a number of pieces moving here, building new geopolitical alignments that really look very, very bad long term for Russia. None of this I probably would have guessed at two months ago. But here we are.

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