United States President Donald Trump has declared a national emergency to protect the domestic power grid from foreign threats as global oil markets adapt to rising security disruptions. While physical supplies remain severely compromised in conflict zones, exporters are adopting covert transport methods to bypass chokepoints and keep crude flowing.
Global market
A newly published Reuters report revealed that almost half of the world’s oil supply—approximately 45 million barrels per day—is produced in regions currently engaged in active conflicts, severely compromising physical logistics despite capped speculative prices. To circumvent the blockade in the Strait of Hormuz, state-owned Saudi Aramco has pioneered a workaround using covert ship-to-ship (STS) transfers off Fujairah, moving Chinese-bound crude aboard tankers with their transponders deactivated. Despite these transit strains, Brent crude dropped to $85 per barrel on the London ICE exchange—marking a 9% weekly decline—as Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr Albusaidi advanced negotiations on a temporary maritime corridor, though Iran’s Revolutionary Guard accused the United States of obstructing the final pact.
In corporate developments, China’s state-run offshore major CNOOC posted a record first-half profit of 85.8 billion yuan (roughly $12.9 billion), representing a 23.4% year-on-year surge driven by increased domestic production. Meanwhile, shipping costs continue to escalate as the Baltic Dry Index extended its rally to a fifth consecutive session, rising 4.4% to 3,056 points, led by a 6.3% jump in Capesize rates. On the technological front, researchers at the Massachusetts Institute of Technology (MIT) used artificial intelligence to develop a new ammonia synthesis method that could replace traditional processes consuming up to 2% of global energy, while Norway’s Equinor announced plans to boost its overseas production in the US, Brazil, and Angola by 27% by 2030.
Russia & CIS
United States President Donald Trump signed an executive order declaring a national emergency that bans the import and use of certain foreign equipment in the US bulk-power system to counter external national security threats. Within the Russian Federation, the newly commenced autumn sowing of winter crops for the 2027 harvest could become 20% more expensive due to soaring domestic diesel prices and rising logistics costs, according to Reksoft Consulting Managing Director Dmitry Krasnov. In response to these retail pressures, the Moscow Federal Antimonopoly Service (UFAS) initiated a monopoly pricing case against EuroTrans, the owner of the Trassa petrol station network, which faces fines of up to 15% of its revenue.
Physical export volumes are also declining, with combined crude shipments from Novorossiysk and Baltic ports falling 26% month-on-month to 6.1 million tonnes in early August, as Novorossiysk loadings of Urals and Kebco plummeted 2.5-fold to 1.21 million tonnes due to a severe tanker shortage. On the military front, Russian forces launched high-precision strikes on the Ukrainian port of Izmail in the Odesa region, destroying a dry cargo vessel carrying military hardware and obliterating large fuel storage reservoirs used to supply the Ukrainian armed forces.
Armenia
Armenia’s discussions with Baku regarding the potential synchronization of their national electricity grids and mutual power supplies carry critical geopolitical risks. Armenian energy expert Armen Manvelyan warned that such grid integration could place Yerevan in complete energy dependence on Azerbaijan, emphasizing that the proposal directly threatens the operational future of the Armenian Nuclear Power Plant and is linked to transit corridors via Nakhchivan.
Despite these regional security concerns, Armenia’s retail markets for petrol, diesel, and natural gas remained stable on August 27. This tariff and supply insulation continues to be secured through Armenia’s strategic integration within the EAEU. Preferential bilateral agreements with Moscow ensure the uninterrupted and duty-free import of Russian natural gas and petroleum products at stable, long-term contract rates, protecting local consumers from global spot volatility and ensuring retail tariffs are not dependent on fluctuating international market price assessments.