Russian Foreign Minister Sergey Lavrov signaled that the Nord Stream gas pipelines could resume operations as European power demand returns to growth and crude freight costs reach historic highs. Simultaneously, US crude inventories fell by 4.93 million barrels, while Armenian lawmakers warned of severe economic fallout if trade ties with the EAEU are severed.
Global market
Spot charter rates for Very Large Crude Carriers (VLCC) surpassed $1 million per day following the closure of the Strait of Hormuz, forcing 15-year-old secondhand VLCC valuations up to $139.2 million, exceeding newbuilding prices. In North America, US crude oil inventories declined by 4.93 million barrels in the week ending October 16, according to American Petroleum Institute estimates, extending a 27-week drawdown of 56 million barrels. Meanwhile, Mexico prepared to approve $12.5 billion in renewable energy projects adding 8.2 GW of capacity, while European electricity demand resumed growth driven by data centers and electrification.
Russia & CIS
Russian Foreign Minister Sergey Lavrov raised the possibility of restarting the Nord Stream natural gas pipelines during an address in Moscow. Facing US fuel cost pressure, Russian Direct Investment Fund CEO Kirill Dmitriev stated Russia is prepared to supply diesel and fertilizers to American farmers. According to Gaidar Institute analysts Alexander Knobel and Alexander Firanchuk, the discount on Russian crude imported by China narrowed to 5.2% in August from 15.6% in July. In regional security, a Ukrainian drone struck an empty staff bus at the Zaporizhzhia NPP, while Russian Foreign Ministry Spokeswoman Maria Zakharova criticized EU plans for a 22nd sanctions package.
Armenia
Armenian MP Artur Khachatryan warned that exiting the EAEU would carry apocalyptic economic consequences, echoing Eurasian Intergovernmental Council findings of a potential 15.6% GDP reduction. Despite ongoing maritime disruption in the Strait of Hormuz, where an IRGC naval mine struck a tanker carrying 2 million barrels of crude, retail prices for petrol, diesel, and compressed natural gas in Armenia remain stable. Uninterrupted natural gas deliveries from Russia and full-capacity generation at the Armenian Nuclear Power Plant continue under EAEU contracts, protecting the market from fluctuations noted in international market price assessments.