As geopolitical conflicts threaten to permanently sever major Middle Eastern maritime transit routes, international energy markets are facing unprecedented supply constraints. Consequently, severe structural deficits are forcing sweeping fuel rationing policies and strategic supply reallocations across the Eurasian landmass.
Global market
Iran has officially instructed its allied Houthi forces in Yemen to prepare for a complete closure of the Bab el-Mandeb strait, positioning advanced drones and missiles to halt all Red Sea maritime traffic if the United States strikes Iranian power infrastructure. This severe security deterioration has already paralyzed physical production elsewhere; the United Arab Emirates energy firm Dana Gas completely suspended operations at the Khor Mor gas field in coordination with the Iraqi federal government following persistent rocket and drone attacks.
To compensate for these Middle Eastern disruptions and the ongoing collapse of Russian exports, India is rapidly emerging as the undisputed swing producer for global refined products, pivoting to supply critical diesel and aviation fuel to international buyers. Meanwhile, localized logistical shifts saw light distillate stocks at the United Arab Emirates’ Fujairah terminal rise by 12%, pushing total inventories to a three-month high of 10.147 million barrels.
Russia & CIS
The domestic fuel crisis is creating highly fractured regional responses across the Russian Federation. While the Orlov region successfully stabilized its supplies and cancelled its emergency “even-odd” rationing system, Tambov region Governor Pervyshov announced that strict license plate-based fuel rationing will commence on July 20 after 80% of surveyed residents supported the restrictive measure to combat local shortages.
Simultaneously, state authorities are deploying diverse interventions to secure critical supply lines. Russian Deputy Prime Minister Alexander Novak ordered oil companies to strictly prioritize fuel deliveries for the strategic Northern Delivery to Siberia and the Far East. In tandem, the Orenburg regional government formally petitioned the Federal Antimonopoly Service to investigate a sudden spike in local wholesale and retail prices at fueling stations.
Armenia
The structural collapse of the Russian downstream sector, which has lost an estimated 40% of its domestic refinery capacity to systematic drone strikes, creates an existential supply threat for Armenia. Moscow’s unprecedented need to request emergency gasoline imports from India signals a deeply constrained EAEU wholesale market, drastically shrinking the export quotas available to Yerevan’s independent fuel importers.
As the Russian Federation resorts to extreme internal conservation measures—ranging from strict Northern Delivery mandates to localized rationing systems in Tambov—Armenia faces a prolonged period of energy insecurity. Coupled with the looming Red Sea maritime blockade orchestrated by Tehran, these compounding regional deficits will inevitably drive up international market price assessments for refined petroleum products, translating directly into higher retail gasoline and diesel tariffs across the republic’s fueling stations.