A Ukrainian drone strike has ignited a major fire at Russia’s Ust-Luga oil export terminal in the Baltic Sea, compounding global energy supply risks as the US-Iran maritime standoff intensifies. Meanwhile, North Asian refiners are actively pivoting toward US crude as the Strait of Hormuz remains effectively blockaded.
Global market
The ongoing US-Iran military deadlock and shipping blockades have forced North Asian refiners to aggressively secure alternative supplies, with at least four regional refiners purchasing US crude this week alone. This pivot comes as shipping transits through the Strait of Hormuz slumped further, forcing oil tankers to increasingly go dark. Transits through both the Strait of Hormuz and the Bab el-Mandeb Strait are experiencing severe disruptions, with the time tankers spend in “dark mode” with transponders switched off extending from just a few hours to a week or more. This maritime friction pushed Brent crude to USD 87.90 per barrel on Friday, while September WTI futures closed late Thursday up 5.33% for the week at USD 81.19 per barrel. Concurrently, the Baltic Dry Index climbed 19 points to 2863.
Geopolitical tensions continue to expand across Red Sea shipping lanes. Yemen’s Houthis targeted Saudi Aramco’s Jazan refinery with two drones on Thursday, causing negligible damage to a storage tank in their third claimed strike on the facility since late July. In Washington, US Vice President JD Vance declared on Fox News that keeping domestic gasoline and oil prices cheap is the administration’s “goal number one” amid the active conflict with Iran. This comes as Iranian Deputy Foreign Minister Kazem Gharibabadi accused US military strikes of causing severe oil pollution along the Persian Gulf coast and Qeshm Island. In South America, Brazil’s Alunorte alumina refinery, operated by Hydro, directly procured a spot LNG cargo after a natural gas supply dispute cut its production by half.
Russia & CIS
An overnight Ukrainian drone strike early on Friday ignited a major fire at the port of Ust-Luga, Russia’s premier Baltic Sea commodity and fuel export terminal, as confirmed by Leningrad region Governor Alexander Drozdenko. Despite heightened regional tensions, Russia continues to funnel significant natural gas volumes to Europe, with Belgium emerging as the EU’s top buyer after surging its June imports of Russian gas by 27% to EUR 268 million. Conversely, Ukraine’s own agricultural shipments collapsed by 70% in August as merchant vessels completely ceased calls at the ports of Greater Odesa, according to Ukrainian Minister of Agrarian Policy Taras Vysotsky. This comes as a joint US report by the Pentagon and State Department estimated that Ukraine will need at least six months to repair damaged substations and up to a year for high-capacity power plants.
Elsewhere in the CIS, a massive power grid failure triggered a simultaneous blackout across Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, though Tajikistan’s Ministry of Energy and Water Resources denied any damage to the vital Nurek HPP. In the financial sector, commercial banks in Belarus, Kyrgyzstan, and Kazakhstan raised commissions on cash Russian ruble deposits for non-residents to a restrictive 15% to curb an excess of ruble liquidity. Meanwhile, Damascus has recovered key oil and gas fields—including Syria’s largest asset, Omar, the Tanak oil field, and the Conoco gas field in Deir ez-Zor—from Kurdish SDF forces, methodically weakening Russian influence over the Syrian energy sector.
Armenia
In the first half of 2026, Armenia and Kyrgyzstan led the EAEU with the most significant growth in industrial production, demonstrating economic resilience within the trade bloc. However, EAEU commercial banks’ decision to impose a 15% commission on cash Russian ruble deposits presents new cross-border financial hurdles for Armenian exporters trading within the region. Additionally, oil prices are climbing on news of US plans for the “economic isolation” of Iran, a dynamic closely monitored in Yerevan due to its proximity and southern trade links.
To insulate its domestic market from these financial and logistical disruptions, Armenia remains heavily dependent on its EAEU energy agreements. These frameworks secure predictable, tariff-exempt natural gas and petroleum shipments from Russia, protecting Armenian businesses and households from extreme price spikes in global energy markets governed by highly volatile international market price assessments.
📊 I can compile a comparative chart illustrating the weekly plunge in Strait of Hormuz tanker transits against the backdrop of the rising global oil benchmarks.