oil

The damage to the oil and gas industry will take years to repair

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The Third Gulf War is here, and while financial markets cling to the hope of a quick resolution, the physical reality tells a much darker story. The world is currently facing the largest supply disruption in the history of the oil market. As detailed The New York Timesbased on the analyzes of energy expert Jason Bordoff, the de facto blockade of the Strait of Hormuz has taken about 20 million barrels per day off the board, which represents 20% of world consumption. To put this in perspective, the International Energy Agency (IEA) recalls that the historic Arab embargo of 1973 “barely” withdrew 4.5 million barrels per day. The logistical, political and infrastructure damage that Operation Epic Fury has unleashed in the Persian Gulf is so profound that, regardless of what is signed in the dispatches, it will take years to return to normality. The new global funnel. Even if the war ended today and the Strait were 100% reopened, untangling the monumental logjam would take months. As Rory Johnston, oil market researcher, explains, to the magazine New Statesman“we are talking about two to three months just to renormalize the global system.” Oil tankers are piled up on both sides of the strait, and a sudden restart would cause a collapse at unloading terminals, reminiscent of the worst bottlenecks of the Covid-19 pandemic. It won’t be suddenly. To this we must add a key factor: the ships will not sail again the day peace is signed. Maritime insurers will require months of proof that the Strait is safe before returning to cover oil tankers without imposing unaffordable premiums. But the situation is even more complex. As detailed in a recent analysis by my colleague Miguel Jorge in Xatakathe dynamics of the Strait have drastically mutated. Iran has turned this artery into a kind of maritime “VIP discotheque.” It is no longer a free international transit route, but rather a selective access system where Tehran decides who passes. While US allies and Israel are banned, countries like Spain – which refused to participate in the military coalition – have received “passes” for their ships. The root of the problem. If the recovery will be so slow it is, fundamentally, because the infrastructure is burning. Unlike previous conflicts, Iran’s strategy is based on an asymmetric war that seeks to destroy the energy pillars of its neighbors. The most devastating example is found in Qatar, where the Iranian drone attack on the Ras Laffan facilities—the largest Liquefied Natural Gas (LNG) export plant in the world— has caused damage which will take between three and five years to repair. Furthermore, we must add temporary closures in Saudi refineries like Ras Tanura that guarantee long-term disruption. The domino effect has already reached the earth. Given the impossibility of removing the crude oil by sea, the storage tanks are bursting. Iraq has been forced to close wells and cut production by 70% simply because there is nowhere to put the oil. This is what is known in the industry as “locked-in” oil, and reactivating all that stopped machinery requires weeks of complex technical work. The specter of chronic inflation. The impact of this paralysis goes far beyond the gasoline pump and will condition the economy for the next five years. As he warns The Economistthe sustained rise in energy prices threatens to entrench global inflation, quickly pushing it to an unbearable 5% or 6%. This means that the cost of living, interest rates and commodity prices will be marked by this crisis for years, slowing down any attempt at real recovery. Added to this is a silent time bomb: food. Not only crude oil transits through the Strait of Hormuz, but a third of the world’s fertilizers. If global agriculture runs out of this vital input, we face a global food crisis that will distort harvests and supermarket prices in the coming seasons. On the threshold of $200 per barrel. If the blockade persists, economic pain will be inevitable. Macquarie Group analysts warn in Bloomberg that if the conflict extends until June, the price of crude oil could reach a whopping 200 dollars. The objective of this extreme price is none other than to force the “demand destruction“: that it be so expensive that people and industries simply stop consuming. The most pessimistic voices warn of an economic catastrophe. Larry Fink, the CEO of the financial giant BlackRock, warned in an interview with the BBC that if the barrel settles at $150, the world will plunge into a “severe and deep recession.” And the consequences are already visible, as jet fuel in Asia has already exceeded $200. Meanwhile, magazines as Fortune report that Goldman Sachs has raised the probability of a recession in the US to 30%. The Wall Street mirage and useless patches. It is fascinating and terrifying to observe the disconnection between physical reality and financial markets. Wall Street lives “spellbound” by algorithms and verbal intervention (jawboning) by Donald Trump. All it takes is a tweet from the American president announcing vague peace plans—quickly denied by Iran—for the stock markets to rise and the price of a barrel to drop momentarily. Investors blindly trust the phenomenon WAD (“Trump Always Chickens Out”), believing that the president will back down before sinking the economy. But tweets don’t fill the tanks. To try to mitigate the blow, the International Energy Agency has coordinated the historic release of 400 million barrels of its strategic reserves. It sounds like a lot, but as the experts consulted by Al Jazeerathat amount barely covers 20 days of the oil that has stopped flowing through Hormuz. It’s a band-aid for an arterial bleed. In fact, such is the desperation of the West that the US administration has gone so far as to temporarily lift sanctions on Russiaallowing it to sell its crude oil on the open market in order to try to relieve the pumps. The big silent winner. While the West is suffocating with inflation and supply problems, just a few … Read more

The biggest oil crisis is not making them blink for a second in the stock market

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We have been immersed in what can now be cataloged like the Third Gulf War. Since the United States and Israel offensive against Iran began at the end of February, the world has faced the greatest disruption of energy supply of its history. We are talking about a crisis that has paralyzed 20% of the world’s crude oil, sequestering about 20 million barrels a day They cannot cross the Strait of Hormuz. Missile falls, drones setting fire to infrastructure and thousands of deaths in the region. The impasse. Any basic economics textbook would dictate that financial markets should be in complete panic. However, the opposite occurs. It is enough for the White House to hint at a rapprochement or a vague ceasefire for the stock market to skyrocket, ignoring the physical fundamentals of a war in full swing. Wall Street lives in a parallel reality: the biggest oil crisis does not make them blink for a second. A virtual collapse in the face of a real war. This same week, the markets experienced 48 hours of unprecedented volatility. As detailed oil priceoil prices fell sharply in the Asian session on Wednesday, falling more than 5%. Brent crude oil, the reference in Europe, pierced downwards the psychological barrier of $100, while the US WTI fell to $87.51. The reason for this relief? According to the agency Reutersthe United States would have sent a 15-point peace proposal to Iran through intermediaries in Pakistan. US President Donald Trump boasted to the media that “productive” negotiations were moving toward a resolution. The screens of the traders were automatically dyed green: the European STOXX 600 index rose 1.2% and London’s FTSE 100 rose 1.1%. As Amelie Derambure explainedfrom the manager Amundi, the market simply launched itself to buy the idea of ​​a relief rally (a surge of relief) at the possibility of a temporary ceasefire. The bombs keep falling. However, there is no ceasefire; This should be clear. How to collect ReutersEbrahim Zolfaqari, spokesman for Iran’s joint military command, publicly addressed Trump on state television with these words: “Has the level of your internal struggle reached the stage of negotiating with yourself? We will never make a deal with you.” At the same time, military reality contradicts stock market optimism. The Pentagon prepares the deployment of elements of the 82nd Airborne Division to the region, a drone attack just hit a fuel tank at Kuwait International Airport, and Israel is deeply skeptical of any concessions Washington might make to Tehran in the shadows. Investors “bewitched” by the algorithm. To understand this disconnection you have to delve into the psychology of the market. An analysis published by FortunePaul Donovan, chief economist of UBSclaims that Wall Street is “spellbound” by the good news. “Markets do not react to information, they generally react to social media posts and headlines, even if they are fake news or contradictory,” says Donovan. Investors suffer from a cocktail of loss aversion and confirmation bias. They desperately want the war to end, so they embrace any story that confirms that desire and ignore negative news. Added to this, the “TACO” phenomenon (Trump Always Chickens Outor “Trump always cows”), a belief rooted in the New York trading floor that the tenant of the White House will end up backing down from the economic pain of a prolonged conflict to protect financial stability. Narrative as a weapon of war. Added to this is what energy expert Javier Blas defines in his column Bloomberg as jawboning (verbal intervention). The White House is winning the narrative battle in the markets without moving a single physical barrel. Trump’s constant messages in Social Truth promising a quick resolution—and even lifting sanctions on countries like Russia to flood the market—have managed to stop the panic. Blas sums it up perfectly: “Instead of being a sign of weakness, TACO is playing in Trump’s favor. No one knows for sure when or if he will try to end the war, which has been enough to prevent the traders skyrocket the price of oil.” The desperation to cling to any positive headline is such that it generates episodes of extreme volatility and information chaos. He Financial Times reported in his coverage how crude oil suffered wild fluctuations (Brent fell 11% to rebound shortly after) after a tweet by the US Secretary of Energy, Chris Wright, stating that the Navy was already escorting oil tankers through Hormuz. The message was deleted minutes later and denied by the White House itself, but the effect on the algorithms had already occurred. The bath of physical reality. While Wall Street plays a game of guessing the next tweets from the Oval Office, the physical reality of oil is stubborn. A report from Bloomberg puts his finger on the sore: The physical market continues to deal with shortages, and the war has demonstrated the absolute control that Iran exercises over the Strait of Hormuz. Although Tehran informed the International Maritime Organization that “non-hostile” ships can transit, the route remains effectively closed and reports circulate about the presence of dozens of naval mines Iranians in the area. The mathematics of disaster, detailed by Reutersthey are chilling. After 25 days of conflict, the world has stopped receiving 500 million barrels (the equivalent of five full days of global supply). The logistical desperation is such that Saudi Arabia has boosted its exports from the port of Yanbu, on the Red Sea, to avoid Hormuz. To compound the crisis, Russia has suspended cargoes at its Baltic ports following a vicious Ukrainian drone attack, adding more uncertainty to the global market. Larry Fink, CEO of the management company BlackRocksummed it up bluntly in statements to the BBC: “If Iran continues to be a threat to Hormuz and oil settles between $100 and $150 per barrel, we will have a global recession.” Collateral damage. The narrative chaos has even reached gold, which has lost their protection status. According to Financial Timesthe price of the precious metal has plummeted 16% since the start of … Read more

The United Kingdom has just detained a Russian oil tanker in Gibraltar. The problem is the possibility that they are armed

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Spain controls one of the busiest maritime passages on the planet: for the Strait of Gibraltar More than 100,000 ships cross each year, including thousands of oil tankers. Just a few kilometers from its coasts, a good part of the crude oil that feeds Europe circulates, and any alteration in that flow has a direct impact on the Spanish economy, from the price of energy to maritime security. From sanctions to interceptions. What for months was a silent economic war you have just crossed a new visible line. The Royal Navy no longer limits itself to observing Russian maritime traffic, it now follows it, identifies it and makes it easier to approach. The case of the MV Deyna oil tanker in Gibraltar mark that change. It is not an isolated incident, it is the symptom of a strategy that is beginning to materialize at sea. And in this turn there is a key detail: for the first time, the pressure on the shadow fleet stops being just legal or financial and becomes operational. The fleet in the shadows. Russia has built a network of hundreds of opaque tankers to continue selling crude oil despite the sanctions. This includes everything from old ships to constant flag changes or business structures that are difficult to trace. All designed for keep the flow of income that fuels its war economy. This network has been for years difficult to attack because it operates on the margins of international law. But now that margin is narrowing, and every interception at key points like Gibraltar points directly to a critical vulnerability of the Russian system. HMS Cutlass stopped the tanker Gibraltar and the bottleneck. The strait, furthermore, is not just any place. As we said at the beginning, it is one of the most guarded maritime crossings on the planet. and convert it at pressure point against Russian oil has a clear logic: controlling traffic is controlling business. HMS Cutlass operations near France show that NATO is willing to use intelligencesurveillance and naval presence to stop this flow. If you will, each intervention sends a message that goes beyond the specific ship, one that announces that it is no longer safe to operate in the shadows near Europe. The problem. It turns out that this is where the story really changes. Because Russia not only wants to protect its fleet, it is considering doing so with military means. Armed patrols, fire equipment on board and even the possibility of militarizing the tankers themselves. What until now were civil ships with economic functions could be transformed into platforms with defensive capacity. And that turns any approach or follow-up into an operation with a real risk of escalation, where an inspection can turn into an armed incident. From drones to oil tankers. Ukrainian naval drone attacks against Russian ships have been the trigger of this change. They have shown that even large maritime assets are vulnerable, and Russia has responded hardening his stance and preparing an active defense. This connects directly with the current global scenario, where energy transportation has become in strategic objective. The sea, which for decades was a relatively stable highway, is beginning to look more and more like a diffuse war front. The domino effect. The paradox is quite evident. While the West try to cut Russia’s revenues, the war in the Middle East has put Moscow’s crude oil back to the center of the market global, with India and China absorbing shipments that previously found no buyer and prices rising higher and higher. And meanwhile the shadow fleet returns to be indispensable. That makes any try to stop it have global consequences, turning each interception into more than just a naval operation: a piece in a much larger battle for control of the global energy flow. A new red line. If you like, the final scenario is the most uncomfortable and dangerous. A Russian tanker detained in Gibraltar It is no longer just a sanctioned ship, it may be the first link in a chain of tensions that escalate rapidly. Because if those ships start to go armedeach interaction at sea stops being administrative and becomes potentially military. And at that point, the question stops being whether the shadow fleet can continue operating, and becomes what will happen the day someone shoots first. Image | kees torn In Xataka | The Canary Islands and Galicia have set off the Navy’s alarm bells. Russia’s ghost fleet has arrived in Spain with warships In Xataka | A ghost fleet has mapped the entire underwater structure of the EU. The question is what Moscow is going to do with that information.

The most unexpected blow of the Iran war is not the price of oil. It’s the one with the chips

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The Strait of Hormuz does not manufacture semiconductors or host data centers. However, its closure effective March 4 threatens to destabilize the heart of the global technology economy. Taiwan, which through TSMC manufactures around 90% of the world’s most advanced semiconductors, runs on imported energy, and a large part of it flowed through that strait. The connection between a conflict in the Middle East and the price of a GPU It is not metaphorical. It is totally physical. Why is it important. What Trump has described as a “minor excursion” began on February 28 as a military intervention against the Iranian leadership and has led to the almost total closure of the passage that connects the Persian Gulf with the Indian Ocean. 20% of the world’s natural gas and 25% of the global oil usually pass through there. Now, practically nothing happens. Between the lines. The problem for the chip industry is not oil, but two much less visible resources: The LNG. The Middle East supplies 37% of the fuel that powers the Taiwanese electrical grid, and that electricity is what TSMC’s factories consume with an energy hunger that demands continuous supply. And helium, which is even more delicate: it is essential in the process of photolithography and has no viable substitute. Taiwan only has LNG reserves for 11 days without external imports. South Korea has 52; Japan, three weeks. The contrast. South Korea and Japan have been building energy security buffers for years precisely because they know how much they depend on abroad. Taiwan, on the other hand, has historically prioritized cost over resilience: its LNG storage capacity is much lower than that of its neighbors, and that is now taking its toll. It’s not just a matter of reserve days. The thing is that Samsung and SK Hynix operate in a country with more robust emergency infrastructure, while TSMC, the company on which practically the entire global technological ecosystem depends, turns out to be the most exposed of all. Yes, but. Companies are not sitting idly by: TSMC has secured LNG supplies until mid-May. As for helium, Australia and the United States have the capacity to partially compensate for Qatar’s decline. Morgan Stanley estimates that several additional shipments are already heading to the islandalthough Taiwan has probably paid a notable premium for them. That premium will most likely translate into a price increase. The big question. The real risk is not the immediate cut, but how long this lasts. Consumers expecting GPUs for gaming They will be the last in line. In Xataka | Chinese airlines are the only ones still flying over Russia. And that is why they are the winners of the Iran crisis Featured image | Xataka

is running out of room to store oil

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At this point, the blockade of the Strait of Hormuz due to the war in Iran is a reality that the world assumes with resignation. But while the West looks askance at the geopolitical tables, in Iraq the situation has gone from concern to financial panic. The phenomenon. As you point out oil priceUnlike neighbors such as Saudi Arabia or the United Arab Emirates, Iraq does not have alternative routes to avoid Hormuz, nor does it have a sovereign wealth fund to serve as a cushion. Its dependence on oil revenues is absolute. Today, cornered and with water up to its neck, Baghdad has had to swallow pride and look north to resurrect a problematic and rusty infrastructure as the only way to survive. A country without space to store its own crude oil. As detailed Reutersproduction in the main fields in southern Iraq – the country’s true economic engine – has plummeted by 70%. They have fallen to just 1.3 million barrels per day (bpd) simply because oil tankers cannot leave the Gulf and storage tanks are overflowing. As pointed out by an analysis in Argus MediaIraq has had to turn off the tap of about 3 million bpd, completely stopping giant fields such as West Qurna, Majnoon or Halfaya. Faced with this scenario, the emergency solution has been to dust off the old oil pipeline Kirkuk-Ceyhanwhich connects the north of the country with Türkiye. This is a route that had been inactive due to damage since 2014 and that has been a constant target of sabotage since the 2003 invasion. From propaganda to damage control. Facing the gallery, the official speech is triumphalist. According to a statement collected by state agency Iraqi News Agency (INA)the reopening of the Sarlo pumping station has been celebrated by the North Oil Company as a resounding “technical and administrative success”. For the Iraqi authorities, recovering this export route represents a “strong return to the forefront” that demonstrates, they say, the country’s iron will and the ability of its engineers to resurrect a strategic infrastructure paralyzed for years. However, the reality behind the government window is much more precarious. Does this mean that Iraq has solved its problem? At all. Faced with institutional optimism, geopolitical analyst Bachar el Halabi offers a harsh reality check: “This is not a recovery of exports, it is damage control.” El Halabi explains that this pipeline will initially provide about 200,000 or 250,000 bpd of federal flow from Kirkuk. A figure that is useful for the heads of the state agency, but that is a tiny fraction if we compare it with the 3.4 million barrels that Iraq usually exports from the south in peacetime. The global market has barely blinked. According to oil pricethe news of the reopening caused Brent crude to drop slightly from $103 to $101 per barrel, but warns that this volume will not make any real difference to global supply. The final diagnosis of El Halabi is blunt: “Iraq’s oil system has been totally exposed. This agreement is for stabilization, it is not a resolution.” The historic pact (and the call from Washington). To ensure that crude oil flows again to Türkiye, Baghdad has had to sit down to urgent negotiations with its historical internal rivals: the Kurdistan Regional Government (Erbil). In this unprecedented pact, federal production from Kirkuk will travel alongside that from Kurdistan through the same tube, the revenue will go directly to federal coffers in Baghdad, and a joint committee has been created to oversee it. But this agreement has not emerged from nowhere. The United States has pulled the strings in the shadows. So much Reuters as analyst Bachar el Halabi confirm that there was a direct intervention from the White House: a phone call between President Trump’s envoy, Tom Barrack, and the Kurdish Prime Minister, Masrour Barzani, was the key that managed to break the historic blockade between Baghdad and Erbil. The shadows of the agreement. Despite the handshake, the pipeline is surrounded by threats. The first major obstacle is physical security: pro-Iran militias have been attacking energy infrastructure in Kurdistan for some time. Can Baghdad really guarantee international oil companies that their facilities will be safe from “mistakes” or deliberate attacks? Furthermore, the political wounds remain open. lTensions had recently escalated because Baghdad attempted to impose a new electronic customs system, something Erbil saw as a frontal attack on its autonomy. For its part, Kurdistan had been accusing the federal government of imposing a “suffocating economic blockade” on them. And hanging over all of this is a diplomatic humiliation that no one wants to mention out loud. Baghdad, being the Arab capital politically closest to Tehran, had to wait until the 18th day of the war to dare to ask Iran for permission to move some of its own oil tankers through the Strait of Hormuz. Hostage to its own geography. Iraq has managed to save a match point critical short-term financial. Thanks to emergency diplomacy and strong pressure from Washington, the country will be able to enter the minimum dollars necessary to pay public salaries and avoid an imminent social collapse. However, this crisis has exposed its greatest weakness. Lacking alternative infrastructure and economic diversification, Iraq is confirmed as the great hostage of the war in the Middle East; an oil giant that, to survive, has had to entrust its destiny to an old patched pipe. Image | Photo by SELİM ARDA ERYILMAZ on Unsplash Xataka | By bombing Ras Laffan, Iran has done something else by retaliating: it has unlocked the ultimate energy crisis

The US is suffocating Cuba energetically. Russia’s response is to send two megaships loaded with oil

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The island of Cuba woke up this week plunged into darkness. A total collapse of the national electrical grid last Monday left the country paralyzedinterrupting surgeries in hospitals, food rotting in refrigerators due to lack of refrigeration and forcing airlines to suspend their flights. This massive blackout is the sixth that the Caribbean nation has suffered in the last 18 months, an unequivocal symptom of a humanitarian and energy crisis that has hit rock bottom. Where does it start. The origin of this asphyxiation dates back to the beginning of the year. The capture of Venezuelan President Nicolás Maduro in january by US forces cut off the supply of oil that Venezuela, its main benefactor, sent to the island. Since then, Donald Trump’s government has intensified the energy blockade. However, in the midst of this strangulation, an old ally has decided to make a move on the board: Russia. The voyage of the lifeboats. Cuba only produces around 40% of the oil it needs for its national demand, historically depending on imports. according to the data provided The Maritime Executive. The island has not received “a single drop” of large-scale fuel since January 9, the date on which the Mexican ship docked Ocean Mariner with 86,000 barrels. Mexico canceled subsequent shipments after giving in to pressure and threats of tariffs from the Trump administration. Now, all eyes are on two boats: seahorse: This Hong Kong-flagged vessel is carrying 200,000 barrels of diesel (or about 27,000 tons of Russian gas, according to maritime intelligence firm TankerTrackers cited by him Financial Times). After being detained for three weeks in the Atlantic, it resumed its march at a speed of 9.9 knots and is expected to reach the western Cuban coast between this weekend and Monday, March 23. Anatoly Kolodkin: Flying the Russian flag and owned by the state company Sovcomflot (sanctioned by the US, the EU and the United Kingdom), this colossus set sail from the Russian port of Primorsk on March 8. According to statements from the Kpler firm collected by Guardianis loaded with about 730,000 barrels of crude oil from the Urals. Its arrival is estimated for April 4, although other sources place it earlier. A fight between the Kremlin and the White House. The arrival of these ships is much more than a commercial transaction; It is a declaration of intent. According to ReutersUS President Donald Trump has raised the tone drastically, telling reporters that he hopes to have “the honor of taking Cuba” and that he can do “whatever he wants” with a nation he considers “very weakened.” Washington’s goal according to New York Timesis to force the departure of the Cuban president, Miguel Díaz-Canel. Secretary of State Marco Rubio has also demanded regime change. Moscow’s response has not been long in coming. Without directly mentioning Trump, the Russian Foreign Ministry issued a statement reaffirming its “unbreakable solidarity” with the “government and brotherly people of Cuba,” condemning attempts at “crude interference” and intimidation on what they called the “Island of Freedom.” as detailed Reuters. However, in practical terms, the relief for Cubans will be short-lived. Jorge Piñón, researcher at the Energy Institute of the University of Texas interviewed by The Countrywarns that diesel seahorse—vital for generating sets, transportation and agriculture—will only be able to satisfy national consumption for 10 days. “We must remember that inventories are empty,” emphasizes Piñón. Cuba had already reached its “zero hour.” Military tension and desperate measures. The Caribbean board is red hot. Adding to the diplomatic tension is the military presence. According to The Country, Two US-flagged vessels, one of them identified as part of the Coast Guard (USCGC), were recently prowling near the coast of Holguín, in eastern Cuba. Asphyxiated by the blockade, the Díaz-Canel government has resorted to unprecedented measures. Havana has allowed for the first time that small private companies import their own fuel. Simultaneously, the regime has invited Cuban exiles to invest and own businesses on the island, while the official newspaper Granma desperately promotes the installation of solar panels, calling them “the light and energy that cannot be blocked.” The countdown. While the ships seahorse and Anatoly Kolodkin shorten the nautical distance to the port of Matanzas, the outcome of this crisis remains uncertain. The secret negotiations between Havana and the US administration to ease the blockade, confirmed last week, hang by a thread in the face of the aggressive rhetoric of the White House. For now, the Cuban government is entrenching itself. As published by President Díaz-Canel on social networkCuba will not give in to those who plan to “take over the country, its resources and its assets.” Any external aggressor, the president warned, will encounter “unassailable resistance.” It is a scenario that inevitably awakens the ghosts of the Cold War: the United States tightening the siege and Moscow sending an energy lifeline to its historic ally. Meanwhile, eleven million Cubans look at the sea, waiting for those ships to bring just over 10 days of light. Image | Unsplash Xataka | Cuba faces an unprecedented situation in the 21st century: that no plane enters or leaves the country due to lack of fuel

Ukraine refused to fix a bombed Russian oil pipeline. The EU has given you 90 billion reasons to do so

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Choking off Vladimir Putin’s war machine seemed like a seamless plan for Europe, but geopolitics has a bad habit of ruining the best strategies. The outbreak of the Third Gulf War has shaken the foundations of the global energy market. Now, with prices skyrocketing and a European Union desperately searching for oil, all eyes have once again fallen on an old Soviet relic: the Druzhba pipeline (which, ironically, means “friendship” in Russian). This gigantic steel tube has today become the trench of a new cold war that threatens to fracture the EU itself. Ukraine, a victim of constant bombings, refused out of principle and security to repair a section of this pipeline that continues to supply crude oil to the European countries closest to Moscow. However, as he advances Financial Timesunprecedented pressure from Brussels and the blocking of a vital loan have forced kyiv to make a 180-degree turn and give in to its European partners. What has happened? To understand the problem, we must go back to the end of January 2026. According to the Ukrainian media Suspilne Mediaa Russian airstrike severely damaged the Brody pumping station in the western Lviv region. The flow of Russian oil transiting through Ukrainian territory towards Hungary and Slovakia was cut short. The diplomatic consequences were immediate. Hungary, which has an exemption to continue buying Russian crude due to its energy dependence, accused Ukraine of delaying reparations for political reasons. Hungarian Prime Minister Viktor Orbán issued a lethal ultimatum, picked up by the chain NPR: “If there is no oil, there is no money.” A threat that was fulfilled. The Hungarian president vetoed a package of macro-financial and military aid from the European Union to Ukraine valued at 90 billion euros, in addition to blocking the twentieth package of sanctions against Russia. Faced with the risk that Ukraine would run out of funds to sustain its economy and its defense, the European Commission decided to intervene. According to PoliticalCommission President Ursula von der Leyen and European Council President António Costa sent a letter to Zelensky offering “technical support and financing” with European funds to repair the pipeline. Cornered by financial asphyxiation, the Ukrainian president ended up giving in and accepted the offer. “I call this blackmail”. For the kyiv government, this transfer has been an extremely bitter pill. In statements to the press collected by EuronewsVolodymyr Zelensky has not hidden his frustration, stating that forcing them to reopen the tap of Russian oil is, for practical purposes, the same as lifting sanctions on Moscow. “I openly say that I am against it. But if you give me the condition that Ukraine will not receive weapons, then, excuse me, I am powerless in this matter. I told our friends in Europe that this is called blackmail,” said the president, reproaching his country for being forced to “finance anti-European policies.” But the Hungarian blockade does not respond only to energy needs; It has a strong domestic component. As pointed out Al JazeeraHungary faces very close parliamentary elections on April 12. Orbán is nine points behind his main rival, Péter Magyar, is using the supply crisis and the figure of Zelensky as an electoral scarecrow. In fact, the Finnish Prime Minister, Petteri Orpo, did not hesitate to denounce upon his arrival in Brussels that Orbán is “using Ukraine as a weapon in his electoral campaign.” Maximum tension between kyiv and Budapest. On the ground, the situation is confusing. On the Ukrainian side, Zelensky has calculated The repairs will take about a month and a half, but at the moment there are no clear indications of what that might be like. While the agency Suspilne Media reports that a small delegation of EU engineers is already in Ukraine assessing the damage (excluding Hungarian and Slovak experts), Ukrainian Foreign Ministry spokesperson Heorhii Tykhyi, declared to The kyiv Independent have no record of any official European mission in the country. On the Hungarian side, the escalation has gone beyond the merely rhetorical to enter the realm of physical retaliation. According to Deutsche WelleIn early March, Hungarian special forces intercepted two armored vans from the Ukrainian entity Oschadbank that were transiting from Austria. In the operation, Hungary seized $80 million in cash and 9 kilos of gold on suspicion of “money laundering.” Various legal experts consulted by the German media greatly doubt the legality of this seizure, suspecting that it is a direct retaliation for the closure of the pipeline. Zelensky, for his part, has not hesitated to describe this act as plain and simple “banditry.” Drones as the “new oil.” While forced to compromise on Russian energy, Ukraine is seeking to capitalize on its own warfare technology to gain international relevance—and funds. As detailed in an analysis of the BBCZelensky has offered the United States and the Gulf countries a $50 billion joint production deal based on Ukraine’s experience making cheap interceptor drones. “For us, this is like oil,” said the Ukrainian president, trying to position his country as a vital provider of security in the midst of the Middle East conflict. In parallel, the energy war is not limited to the Druzhba pipeline. As revealed The Moscow Timesthe Russian state company Gazprom recently denounced that Ukraine launched a wave of 26 drones against compression stations in the Krasnodar region. These infrastructures are key for the TurkStream and Blue Stream gas pipelines, which are currently one of the few remaining routes for Russia to export gas to Europe through Turkey, demonstrating that kyiv continues to try to hit the Kremlin’s energy portfolio wherever it can. The final pulse in Brussels. All this tension has led to the summit of European Union leaders that starts today, March 19, 2026, in Brussels. As he emphasizes TVP Worldthe pressure on Viktor Orbán is absolute. Upon arrival at the summit, the head of European diplomacy, Kaja Kallas, went straight to the point: “It’s time to show our support for Ukraine.” In Brussels right now they are crossing their fingers. As pointed out … Read more

The “bottom of the barrel” was the cheapest waste of the oil industry. The war in Iran has just turned it into an unaffordable luxury

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Historically, the fuel oil has been known in the oil industry as the “bottom of the barrel.” Typically cheap and underappreciated, this byproduct comes from the bottom of distillation towers, the equipment where crude oil is heated and split into multiple products. In fact, very often, this fuel cost less than a barrel of crude oil, and refineries sold it at a loss as it was a simple remnant of the process necessary to manufacture high-value products such as diesel. However, as expert Javier Blas warns in your column for Bloombergthe Iran war has turned the industry upside down. That waste that no one wanted has become an ultra-expensive raw material overnight, which is bad news for the global economy. Despite being overshadowed by other distillates, the fuel oil plays an immense role in the modern world, driving container ships that act as the workhorses of globalization. The breakup of a market at the limit. In the current conflict, all eyes they are set in the rises and falls of crude oil. However, the real drama is hidden in the physical maritime bunker markets, where the traditional relationship between the price of crude oil and refined products has been completely broken. With crude oil hovering around $100, the fuel oil It shouldn’t be much more expensive. In reality, it is trading at $140 a barrel in Singapore and almost $160 in the Emirati port of Fujairah. A report of Lloyd’s List explains that the average price of the fuel oil of very low sulfur content (VLSFO) in the 20 main bunkering centers reached $1,005 per ton, double its pre-war cost and the highest figure since the Russian invasion of Ukraine. For his part, analyst Clyde Russell warns in his column Reuters that, while crude oil futures are confident of a solution, prices for physical cargoes are sending signals of an impending crisis and a supply chain that is buckling under pressure. The missing link. The key to this specific crisis lies in geography and geology. As Blas points outrefineries in Saudi Arabia, Kuwait and the United Arab Emirates produce 20% of all fuel oil sold internationally. Added to this is a crucial geological factor: the crude oil from the Persian Gulf generates much more fuel oil than that of other regions. For example, when distilling a barrel of Saudi flagship crude oil (Arab Light), approximately 50% of what comes out is residue for fuel oil, compared to 33% left by US WTI crude oil. This explains why the blockade of the Strait of Hormuz is a death trap specifically for this byproduct. The logistical panic. The real urgency is no longer just the price, but physical availability. The shipping industry has raised the alarm because supplies are critically low in Singapore and Fujairah, two of the world’s most important bunkering hubs. “If we do nothing, we risk ending up with dry supply points in Asia,” Vincent Clerc sharply warnedCEO of shipping giant Maersk. To avoid collapse, Maersk needs to be proactive and is transporting its own fuel around the globe to have the right amount in the right place, an unprecedented challenge that Clerc compares to the logistical juggle experienced during the Covid-19 pandemic. On a day-to-day basis, the charter market is paralyzed. Scott Bergeron, CEO of Oldendorff Carriers, confess to Lloyd’s List that there are problems getting fuel quotes, and that “availability for April is a big question mark.” The operational consequences will be drastic: Global slowing: Ships will reduce their speed to conserve fuel. Port congestion: Massive congestion is expected in ports that still have reserves. Accelerated scrapping: Older and inefficient fleets could be forced to be scrapped due to the enormous costs. Furthermore, according to Clyde Russell in your column for ReutersAsian refiners are cutting production, and countries like South Korea could restrict exports, pushing dependent nations like New Zealand into rationing measures. The environmental dilemma. This severe lack of supply is even putting pressure on climate regulations. Given the suffocating lack of distillates, The Maritime Executive details that the regulators could be tempted to temporarily suspend IMO 2020 emissions regulations. This would allow ships to return to burning heavy fuel oil (HSFO) widely, freeing up ingredients for other critical sectors. Meanwhile, ships already equipped with scrubbers (scrubbers) can still legally burn the cheaper HSFO. As the price gap between clean and dirty fuel widens, these shipowners are realizing massive savings; In fact, this price spread reached $189.50 per ton in Singapore. The current crisis leaves no room for maneuver. As Javier Blas saysthe world has already spent its main lines of defense against this oil shock: compromised refineries have been avoided and strategic reserves have been emptied. Looking to the future, the only variable capable of balancing consumption with a meager supply is the “destruction of demand” through suffocating prices. Ship fuel may come from the bottom of the barrel, but it has proven to have the ability to sink or keep afloat international commerce. Today, without a doubt, it has become the world’s main problem. Image | Photo by william william on Unsplash Xataka | The US Navy already knows what is going to happen to the planet: the mission to open Hormuz is the closest thing to a suicide operation

“We felt cheated.” Even gas station owners are freaking out about the sudden, meteoric rise in oil

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The missiles fell and the energy markets soared. When the conflict officially began on February 28 between the US, Israel and Iran and its expansion through the Middle East, the energy markets responded to the new scenario and in more or less two weeks, the barrel of Brent has already risen by 50% according to EIA data. At gas stations, the price of fuel also rose overnight. The rapid rise in fuel. Below these lines you can see how the average price of fuel in Spain has evolved according to the data extracted from the Ministry of Ecological Transition of the States and compiled by the Dieselogasoline website. Thus, if we closed February with a price of €1,493/l for Unleaded 95 and €1,548/l for Diesel A+, March has been a relentless uphill climb for all fossil fuels. Today they mark €1,727/l and €1,935/l respectively. With this panorama and the figure of 2 euros/liter on the horizonthe first days already There were long lines at some service stations. before what was coming. Evolution of fuel prices in Spain in March. Dieselogasolina.com The perfect storm. With the blockade of the Strait of Hormuzthe place through which approximately 20% of the world’s production of crude oil and liquefied natural gas passes, confirmation that China turns off the tap of its exports to meet domestic demand, the slowdown in activity of some deposits and that large merchant companies are paralyzed or surrounding all of Africa to satisfy demand at the cost of a longer and more expensive route, it is clear that the scenario for buying oil looks bleak. In fact, not even the International Energy Agency release 400 million barrels of emergency reserves (the largest mobilization in history) was enough for the market to react. Ultimately, that number equivalent about four days of world consumption or about 20 days of what passes through the Strait of Hormuz. And it could be worse: as the spokesman for the Khatam al-Anbiya headquarters of the Islamic Revolutionary Guard Corps explained: “They will not be able to artificially lower the price of oil. Prepare for oil to reach $200 per barrel,” picks up Al Jazeera. Instability, the reduction in supply and its use as a measure of pressure summarize the black picture. But that gasoline is not that of war. Although the history of conflicts in the Middle East is an unequivocal precedent to glimpse the rise of fuel and everything, because in practice it has an impact on the logistics of the bulk of the activities: if the fruit store brings its delivery five times a week, those deliveries cost more. And if you travel 50 kilometers a day to get to work, it will also cost you more. Economy of the obvious. However, there is a harsh reality: that fuel that you are already paying at war prices was acquired previously. We are paying prices for the future, those for replacement. And not just consumers: also gas stations. As Michel-Édouard Leclerc, president of the E. Leclerc supermarket chain and its gas stations, said, to public broadcaster Franceinfo: “We felt cheated, just like the drivers, by the almost automatic speed with which prices rose.” In his case, he also announced the reduction of 30 cents at the group’s gas stations in France thanks to negotiations with suppliers. Who sets the price of fuel. In the Spanish state, prices have been free since 1998, as the CNMC explainsbut from here there are several actors that influence: The international market, based on the price of Brent oil or refined oil in the reference markets. The refinery or wholesale operator, which adds its operating and logistics margin until distribution. The gas station operator: if it is a flagship station such as Repsol or BP, the price is practically a matter for the parent company. If it is independent or belongs to a large surface (such as Plenoil or Leclerc), it has more room for fixation. Hence they are the cheapest. The State through taxesmore specifically the Special Tax on Hydrocarbons and VAT. In Xataka | The rocket and the pen: the theory that explains why the rise in gasoline is here to stay In Xataka | There is a hidden war to sell us the cheapest possible gasoline. One that Ballenoil and Plenergy already dominate Cover | Leclerc

Faced with the fear of a barrel of oil at $200, the US has made an unprecedented decision: remove sanctions on Russia

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After almost two weeks, the Iran war already has a great (and unexpected) beneficiary: the Kremlin. days after giving carte blanche to India to buy million barrels of Russian crude without fear of sanctions, yesterday Washington was one step further by lifting (partially) the sanctions imposed on the Russian oil industry after the invasion of Ukraine. With this, he hopes to alleviate the effects of the Iran war on the energy market and prevent Tehran’s threat from becoming a reality: that the barrel of Brent shoots to $200an all-time high. The question is… What will it mean for the war in Ukraine? What has happened? That the US has decided to pause the sanctions that penalize the purchase of Russian oil, a measure adopted four years ago and which seeks asphyxiate the Kremlin’s ability to finance its troops in Ukraine. The White House just published an order in which it gives the green light to the purchase of crude oil and oil products from Russia. Of course, with small print. The suspension of sanctions is temporary. It will only affect merchandise previously loaded on ships and (a priori) will be limited to one month: from March 12 to April 11. Click on the image to go to the tweet. Why do you do it? The task of announcing the measure has been the Secretary of the Treasury, Scott Bressent, who a few hours ago insisted in the White House’s efforts to “promote stability” in the global energy market and above all “keep prices low” while the Iran war lasts. “To expand global supply reach, Treasury grants temporary authorization for countries to purchase Russian oil stranded at sea,” explains the high office. “This measure, which is limited in scope and short-term, applies only to oil that is already in transit.” In the same messageBressent insists that the rise in crude oil prices this week, coinciding with the escalation of tension in the Persian Gulf, is “temporary” and claims that “in the long term it will greatly benefit” the US economy. In recent days, Trump himself has tried to downplay the fluctuations in the Brent barrel. Recently he even stated that, being “the largest oil producer”, the US makes “a lot of money” when crude oil rises. Does context matter? A lot. In fact, the decision of the Treasury Department cannot be understood without taking into account several factors. The first, the escalation in the value of oil to which Bressent himself refers. The stock charts show that the cost of a barrel of Brent has skyrocketed in recent days: from marking just under 70 dollars in mid-February, it has gone above 90, with peaks that exceeded the barrier of the 100. Those fluctuations already affect to those who need to fill the car tank and threaten to go beyond transportation, infecting the shopping basket. What will happen now? The problem is not just how much oil has risen over the last two weeks. There is (very much) concern that the barrel of Brent will continue to become more expensive and, if so, by how much. The Iranian regime already has shown its ability to condition oil tanker traffic through the Strait of Hormuz, a strategic maritime passage that channels 20% of international oil, and Tehran seems willing to use ‘black gold’ as a weapon of war. On Wednesday the regime of the ayatollahs threatened to the US (and the West) with a scenario in which the Brent barrel doubles its value and shoots up to $200, shattering the all-time high of 2008, when it reached $174.5. How will it affect Russia? That’s the other big question. The order just published by the US Treasury will allow Russia to market oil for a month without its customers risking sanctions, generating a flow of cash for the Kremlin. Bressent questions in any case the scope of that injection of funds. “It will not bring significant financial benefits to the Russian government, which derives most of its energy revenue from taxes levied at the point of extraction,” defend the secretary. Is it an exceptional measure? The truth is that it is not the first ‘balloon of oxygen’ that Trump has granted to the Russian oil industry since he began his military operation in Iran. It’s been a week now temporarily relaxed its sanctions policy so that India can buy Russian oil. The measure was approved with conditions very similar to those that Washington now extends to the rest of the countries: a 30-day suspension limited to crude oil already loaded on ships. It is not the only card that the White House has tried to reduce market tension. Another, adopted hand in hand of the International Energy Agency, has been to release millions of barrels of reserves. How much will it benefit Moscow? The great unknown. The measure approved by the US is temporary and has a limited scope, but it will probably allow the Kremlin to sell its oil without having to apply significant discounts to offset the possible sanctions that its buyers faced. Recently Financial Times I calculated that Russia is already winning up to 150 million of dollars in extra income every day through the sale of oil, a plus directly related to the conflict in Iran, the closure of the Strait of Hormuz, the turbulence in the Gulf and the growing interest of India and China. But will it help the Kremlin? The situation of the Russian coffers is not particularly buoyant. Its public deficit accumulated during the first two months of the year almost reaches the objective set for the entire year and there are those who question that the extra injection it will receive over the next month thanks to oil will increase its room for maneuver in Ukraine. The reason: hydrocarbons represent only a part of the income (relevant, but not decisive) on which the Kremlin depends, which after four years of war has seen how the country’s military industry is conditioning its economy. Images | … Read more

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