Strait of Hormuz shipping transits have plummeted following a naval clash in the Gulf of Oman, triggering a regional cancellation of maritime war-risk insurance coverage. Meanwhile, Russia has completely halted its damaged Orsk refinery as Armenia seeks an independent economic path outside binary geopolitical blocs.
Global market
The Strait of Hormuz saw shipping transits plunge to 16 vessels on August 11 after the US Navy fired on an Iran-bound container ship in the Gulf of Oman, as reported by S&P Global Commodities at Sea. This security breakdown prompted reinsurers of Gard P. & I. (Bermuda) Ltd. and its affiliates to issue an immediate Notice of Cancellation for war risks in the Indian Ocean, Gulf of Aden, and Red Sea. High oil prices have delivered a massive windfall, with China’s largest coal-to-chemicals producer, Ningxia Baofeng Energy Group Co., which accounts for one-third of China’s coal-to-chemicals output, reporting a record first-half profit of USD 1.4 billion. Additionally, New Zealand’s regulator NZP&M granted Matahio NZ Onshore Limited a 10-year petroleum mining permit in the Taranaki region to secure domestic gas supply, while state-controlled Indian Strategic Petroleum Reserves Ltd (ISPRL) began finalizing feasibility studies for strategic reserves at Bikaner and Bina. To bypass dangerous southern routes, UK logistics provider Davies Turner launched a seasonal express container service via the Northern Sea Route using Sea Legend vessels. In other infrastructure developments, a tank explosion at Gunvor Energy’s Europoort terminal in the port of Rotterdam left one person dead, and an Alaska LNG pipeline bill failed in the legislature, triggering a sharp rebuke from Alaska Governor Mike Dunleavy.
Russia & CIS
Russia’s domestic refining network suffered a major blow as local officials confirmed the complete shutdown of the Orsk refinery after a Ukrainian drone attack left key infrastructure irreparably damaged. To protect maritime fuel flows in the Black Sea, Russian shippers have begun equipping sanctioned tankers, such as the large-tonnage vessel Caruzo, with anti-drone nets upon exiting the Bosporus Strait. Meanwhile, to alleviate local shortages on its southern borders, Russia delivered 1,000 tons of fuel to Abkhazia on August 11, a systemic supply confirmed by Abkhazian Minister of Energy Batal Mushba. In the nuclear sector, Rosatom’s director of Northern Sea Route development Azamat Khochuev announced plans to construct four additional floating nuclear power plants in Russia, while Rosatom General Director Alexey Likhachev assured that Hungary’s political shifts have not delayed the Paks-2 NPP construction. On the diplomatic front, Kazakh Foreign Minister Ermek Kosherbaev held talks with EU’s foreign policy chief Kaja Kallas to discuss infrastructure development, specifically regarding the Caspian Pipeline Consortium (CPC).
Armenia
During a briefing on August 13, Armenian Prime Minister Nikol Pashinyan outlined a potential “third way” for Armenia’s foreign policy that avoids a binary choice between the European Union and the EAEU, clarifying that any EU membership referendum would only occur after extensive preparatory work and a formal application. On the regional integration front, Armenian Minister of Economy Gevorg Papoyan presented agricultural development priorities at the EAEU council and held talks with his Iranian counterpart Fathi on joint ventures. Yerevan is also closely monitoring discussions between Georgia, Azerbaijan, Turkey, and Bulgaria regarding the establishment of a regional electricity transit corridor for mutual power transmission. Access to EAEU’s long-term energy frameworks remains critical for Armenia, shielding its consumers from the volatile price spikes of the spot market governed by highly unpredictable international market price assessments.
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