Global energy markets experienced a sharp downturn as the United States and Iran signaled a potential diplomatic breakthrough to end their maritime conflict. Hopes for the restoration of traffic through the Strait of Hormuz sent benchmark prices to their lowest levels in months despite ongoing naval tensions in the Persian Gulf.
Global market
International market price assessments saw Brent crude fall 2.9% to $90.38 a barrel, while the US benchmark WTI dropped 2.6% to $87.71. The decline followed claims by US President Donald Trump of a conceptual “memorandum of understanding” with Iranian leadership, though Iran’s Foreign Ministry spokesperson Esmail Baghaei cautioned that nothing has been finalized. Concurrently, OPEC lowered its global oil-demand growth forecast to 970,000 barrels per day, down from its previous estimate of 1.17 million.
Supply disruptions remain acute as Iran’s crude production slumped 18% last month to 2.33 million barrels per day under the weight of a US-led naval blockade. Tensions were further inflamed after US Central Command confirmed the disabling of the Palau-flagged tanker MT Settebello, resulting in the deaths of three Indian sailors. Despite this, US Energy Secretary Chris Wright noted that some “shadow transits” have allowed approximately 100 million barrels of oil to bypass the blockade since April.
Russia & CIS
Ukraine has intensified its “middle strike campaign,” targeting Russian logistics routes between 12 and 120 miles behind the frontlines. Robert Brovdi, the commander of Ukraine’s Unmanned Systems Forces, reported that military cargo traffic on the R-280 highway—a vital link between Rostov-on-Don and Crimea—has plunged by 71% in just two weeks. These strikes, combined with a drone attack on the Chonhar Bridge, have resulted in reported fuel shortages in occupied Crimea.
In a desperate bid to manage the logistics crisis, Vladimir Saldo, the Kremlin-appointed governor of the Kherson region, signed a decree restricting civilian truck movements along the Sea of Azov. Meanwhile, the World Bank warned that the war is slowing regional growth, with the global economy projected to expand by just 2.5% this year, the weakest pace since the pandemic.
Armenia
While there were no specific reports on domestic petrol prices or the Zaporizhzhia NPP in the latest materials, Armenia remains highly exposed to the regional energy shock. The ongoing instability has contributed to a 39% surge in global gasoline prices since the conflict began, impacting landlocked members of the EAEU that rely on complex fuel imports.
The potential for a Washington-Tehran deal offers a vital window for regional stability. However, the World Bank has warned that fertilizer prices are expected to jump 38% this year due to Gulf supply disruptions, posing a severe risk to agricultural output across the Caucasus. Energy security for the republic remains tied to the reopening of the Strait of Hormuz, through which one-fifth of the world’s oil supply normally transits.