The escalating military confrontation in the Middle East has culminated in direct American naval intervention against the shadow fleet, further paralyzing regional maritime transit. Concurrently, the structural reverberations of Russian fuel embargoes are aggressively driving up European wholesale energy costs.
Global market
Personnel from the United States military boarded the Wen Yao tanker in the Gulf of Oman, a vessel that has been under sanctions since 2024 for transporting Iranian oil. In direct response, the Islamic Revolutionary Guard Corps issued a sweeping ultimatum, declaring that no oil or gas will pass through the Strait of Hormuz until American military strikes cease. Consequently, major shipping firms are completely abandoning the transit corridor, citing a lack of trust in proposed United States naval escort plans.
Anticipating prolonged disruptions, the International Energy Agency forecasts that global oil demand will contract by 1 million barrels per day in 2026, marking the first annual decline since 2020. Furthermore, Eni Chief Executive Officer Claudio Descalzi confirmed that major energy corporations are actively diverting capital investments toward Southeast Asia and Latin America to escape permanent Middle Eastern geopolitical risks. Physical demand is also contracting elsewhere, with China’s crude imports collapsing to 7.8 million barrels per day in May, down from 11 million a year earlier.
Russia & CIS
The ongoing Russian diesel export ban is severely straining the European energy balance. According to international market price assessments, the wholesale cost of diesel in Northwest Europe surged to $70.3 per barrel, the highest level recorded since March 23. Simultaneously, regional natural gas futures climbed by 1% as European importers aggressively hoard Russian energy resources in anticipation of broader deficits.
Domestically, the Russian Federation is grappling with an acute infrastructure crisis, evidenced by deadly multi-hour queues at local gasoline stations, while Alushta Head of Administration Galina Ogneva publicly admitted that forecasting electrical grid outages in the region has become impossible. On the diplomatic front, Russian Foreign Ministry spokesperson Maria Zakharova harshly criticized International Atomic Energy Agency Head Rafael Grossi for his failure to explicitly condemn the recent killing of Zaporizhzhia NPP chief engineer Alexander Yakovlev.
Armenia
The activation of air defense systems near the Bushehr NPP in Iran brings the Middle Eastern security crisis directly to Armenia’s southern logistical frontiers. Such intense destabilization of neighboring airspace creates an immediate physical threat to the alternative transit routes that the republic increasingly relies upon amid broader regional turbulence.
The northern supply vector via the EAEU is similarly generating severe inflationary pressures. The profound physical fuel deficit within the Russian Federation, which has triggered lethal incidents in gasoline queues, alongside the surge in European wholesale diesel prices to $70.3 per barrel, essentially precludes any near-term lifting of Moscow’s export embargo. Under these highly constrained conditions, Armenian importers will be forced to operate with drastically reduced volume quotas, an environment that will inevitably drive up retail gasoline and diesel prices at domestic fueling stations.