Global crude prices have retreated to pre-conflict levels following diplomatic progress between the United States and Iran and the stabilization of maritime transit. Meanwhile, Russia’s energy sector faces a systemic crisis, with 17 regions imposing mandatory fuel rationing as domestic refining capacity remains severely compromised.
Global market
Brent crude prices have returned to values recorded before the outbreak of hostilities between the United States and Iran, reflecting a significant cooling of the geopolitical risk premium. Following the tentative reopening of the Strait of Hormuz, ADNOC, the national oil company of the United Arab Emirates, reduced its official selling price for flagship Murban crude to $101.48 per barrel for July. Middle Eastern fuel oil exports are expected to surge 20% this month to 508,000 barrels per day, as producers like Iraq and Saudi Arabia successfully diverted shipments through ports outside the Persian Gulf.
The technological sector is emerging as a primary driver of long-term energy demand. The Tennessee Valley Authority (TVA) has drafted plans to add between 7 GW and 26 GW of natural gas capacity by 2040 to support the rapid expansion of artificial intelligence data centers. In Europe, UK Energy Secretary Ed Miliband vetoed a Treasury plan to increase North Sea drilling, which had been proposed to generate $24 billion in tax revenue for military expenditures.
Russia & CIS
Russia is grappling with its most acute nationwide fuel shortage in years, with 17 regions now enforcing mandatory limits on gasoline and diesel sales. According to international market price assessments, the Kapotnya refinery, the Moscow region’s largest supplier, will remain offline until at least the end of 2026 due to structural damage from drone strikes. This supply crunch caused domestic gasoline prices to jump 3% in a single week, pushing weekly national inflation to 0.25%.
In the Black Sea region, Sergey Aksyonov, the head of Crimea, warned of rolling power outages following strikes on energy infrastructure, while banks in Sevastopol have transitioned to diesel generators. In the corporate sector, the government of Bashkortostan sold its remaining stake in Bashneft to Rosneft for 14.8 billion rubles. To manage the crisis, Russian Deputy Prime Minister Alexander Novak held emergency talks to prevent total supply failures in eastern territories, including the Irkutsk region.
Armenia
The Armenian government has reached an agreement to borrow 80 million euros from the OPEC Fund for International Development to cover its state budget deficit, with the 18-year loan carrying an interest rate of approximately 4%. Addressing public concern over energy costs, David Khudatyan, the Minister of Territorial Administration and Infrastructure, dismissed reports of an imminent hike in Russian gas prices as media speculation, describing the bilateral energy partnership as stable.
Prime Minister Nikol Pashinyan stressed the importance of economic diversification within the EAEU framework, noting that Armenia must protect its reputation by curbing the production of counterfeit goods. Financial support for these transitions remains active, as the Eurasian Development Bank (EDB) confirmed it has funded $400 million in Armenian projects since 2022, primarily in the energy and agricultural sectors. Additionally, to maintain food security amid regional volatility, Yerevan has utilized a duty-free quota to import 5,000 tons of onions, largely sourced from Iran.