The United States has established a secret shipping corridor through the Strait of Hormuz to transport 10 million barrels of oil daily, responding to a near-total collapse of Iranian oil exports. Concurrently, a massive drone attack on Moscow has forced Russian fuel networks to implement gasoline rationing as domestic supply pressures intensify.
Global market
The US military has established a secret shipping corridor in the Strait of Hormuz to transport 10 million barrels of crude oil per day, responding to the virtual cessation of Iranian petroleum exports. This emergency measure follows the expiration of the Islamabad memorandum on August 17 without an extension, which effectively stranded previous transit pacts. The security crisis in the region was underscored by a fatal strike on the Liberia-flagged bulk carrier Minoan Dignity in the southern corridor of the strait, which killed the vessel’s chief engineer. Concurrently, Governor of the Central Bank of Iran Abdolnaser Hemmati officially confirmed that Iranian oil exports have practically stopped, though he claimed the country maintains sufficient foreign exchange reserves.
These geopolitical bottlenecks have pushed diesel refinery margins (diesel crack spreads) above 100 dollars per barrel, reflecting a severe global shortage of industrial distillates. Despite aggressive investments in renewable energy, coal continues to dominate global power generation; the International Energy Agency (IEA) projected that coal-fired plants will produce 10,974 terawatt-hours (TWh) in 2026 out of a global total of 33,313 TWh. Additionally, EU Commissioner for Energy Dan Jørgensen warned of severe risks to electricity supplies in Central and Southeastern Europe due to extreme heatwaves and record-low reservoir levels. In other developments, oilfield services giant SLB is preparing to reactivate up to 15 drilling rigs in Venezuela, while Japan’s crude oil imports from the US surged by 814.5 percent in July.
Russia & CIS
Russia’s domestic fuel crisis has escalated significantly after a massive wave of at least 600 Ukrainian drones targeted the Moscow capital region on Tuesday, triggering widespread panic and causing some gas station networks to introduce new retail gasoline rationing. In response to the widening deficit, the St. Petersburg Exchange conducted its first sales of imported gasoline, distributing 360 tons of fuel from the “Kola” oil base in the northern Murmansk region on August 19. The Russian government maintains that supply pressures will ease as domestic refineries emerge from scheduled seasonal maintenance.
The Russian energy sector faced additional geopolitical headwinds as the government of Switzerland partially joined the European Union’s 20th sanctions package, imposing new restrictions on Russia’s energy, financial, and trade sectors. Domestically, financial strain on utility networks was highlighted by Head of Ingushetia Mahmud-Ali Kalimatov, who announced that communal debts for gas, electricity, and water in the region have exceeded 22 billion rubles. In Central Asia, Kyrgyzstan provided clarity on the massive August 14 blackout that affected four nations, tracing the cascading outage to a failure at a key Kyrgyz hydropower plant, though Bishkek vigorously denied responsibility for the regional network breakdown.
Armenia
Armenia’s energy security outlook is closely tied to the Russian government’s expectations of a swift recovery in fuel supplies once domestic refineries complete scheduled maintenance. A resolution of Russia’s refining and distribution bottlenecks—underscored by the unprecedented drone strikes on Moscow and subsequent fuel rationing—is crucial to maintaining stable fuel flows to the Armenian market ahead of the autumn harvest. As a member of the EAEU, Armenia continues to rely on duty-free imports of Russian natural gas and petroleum products at stable, non-market rates to protect local markets from regional supply shocks.
Moreover, Armenian authorities are monitoring the regional security environment after Governor of the Central Bank of Iran Abdolnaser Hemmati confirmed that Iranian oil exports have virtually ceased. While this halts direct southern trade options, the opening of a secret US transit corridor for 10 million barrels of oil per day through the Strait of Hormuz helps prevent a destabilizing global energy shock. In the nuclear sector, Russian state corporation Rosatom successfully refuted allegations regarding safety risks at the El Dabaa NPP under construction in Egypt, highlighting the reliability of its Generation III+ reactor technologies. These protective administrative and bilateral frameworks insulate Armenia’s retail energy tariffs from volatile spot markets, which remain exposed to fluctuating international market price assessments.
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