The Eurasian Economic Union is evaluating a strategic proposal from Iran to establish a unified petroleum market, as escalating Middle Eastern hostilities and refined product deficits reshape global supply lines. This comes as Russia takes the unprecedented step of importing fuel from South Korea to stabilize its domestic market.
Global market
Global oil prices surged following a new escalation in Middle Eastern hostilities, where Houthi forces launched an attack on Saudi Arabia’s southern province of Najran, killing 11 civilians, according to a spokesperson for the Saudi-led military coalition. Supply anxieties are compounding as Iran considers banning US, Israeli, and other hostile vessels from the Strait of Hormuz, threatening a fine equal to 20% of cargo value for violators. Amid these geopolitical tensions, Chinese crude imports rebounded in July, climbing 22% from June’s decade-low to average 8.45 million barrels per day, totaling 35.73 million tons.
Concurrently, mainland Europe’s severe summer heatwave and drought have reduced water levels on the Rhine and Danube rivers to critical lows, prompting chemical transport force majeures and widespread shutdowns of nuclear power plants. To protect cargo flows elsewhere, the Panama Canal Authority announced a reduction in maximum vessel draft to 48 feet starting August 26, 2026.
Russia & CIS
To combat severe domestic shortages triggered by relentless Ukrainian drone strikes on refining infrastructure, Russia imported 30,000 metric tons of fuel from South Korea in July. Kpler and Vortexa tracking data showed at least two short-range tankers carrying Korean fuel to Russia’s Far East after Russian refinery throughput plunged to a twenty-four-year low of 3.6 million barrels per day. Amid these supply vulnerabilities, Ukrainian member of parliament Oleksiy Kucherenko admitted that prescription energy facilities had not been fully protected ahead of the upcoming winter.
Meanwhile, regional transmission lines suffered damage as a storm knocked out the Balti-Dnestrovsk electricity line connecting Moldova and Ukraine, though Moldovan state utility Moldelectrica managed to avert blackouts through rapid system adjustments. At the EAEU Intergovernmental Council in Kyrgyzstan, Russian Prime Minister Mikhail Mishustin highlighted the resilience of the bloc, noting that internal EAEU trade grew 10% in 2025 to reach 7.5 trillion rubles.
Armenia
Speaking at the EAEU Intergovernmental Council, Armenian Prime Minister Nikol Pashinyan declared that Yerevan recognizes the impossibility of simultaneous membership in both the EAEU and the EU. Pashinyan rejected proposals for a national referendum on EU accession as meaningless, stating that the European Union currently does not offer a viable alternative for Armenia. He emphasized that expanding integration with EAEU partners is a primary foreign policy priority, while warning that trade barriers within the bloc risk generating public skepticism.
Armenia’s economic position within the bloc could be further reshaped by a new proposal from Iranian Minister of Trade Seyyed Mohammad Atabak, who urged the EAEU to establish a common oil market, implement central bank digital currencies, and build an alternative payment network to replace SWIFT. Deepening these multilateral ties is expected to bolster Armenia’s utility security, shielding its domestic retail energy tariffs from the fluctuations of international market price assessments.
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