Global Fuel Crisis Deepens Amid Iran-Russia Conflict

The closure of the Strait of Hormuz after Iran’s strike on Tehran on February 28 and the ongoing war with the United States have choked oil shipments from the Middle East. Ukrainian drone attacks have knocked out roughly 40 % of Russia’s refining capacity—about 3 % of global refining capacity, according to Capital Economics. Moscow’s ban on gas and diesel exports through the end of January 2027 further constricts supply. The diesel crack spread has risen to $102 a barrel, the first ever and nearly three times pre-war levels. U.S. gasoline averaged $4.07 per gallon, up 30 % year-over-year, while diesel is 48 % higher and jet fuel more than 70 % higher.

CNN

• Middle East: Refineries hit by attacks; operating plants face export bottlenecks.

CNN

• Russia: Drone strikes cripple refineries; export ban protects domestic supplies.

CNN

• China: Limiting its own fuel exports and reducing oil imports, tempering price spikes.

CNN

• U.S. Gulf Coast: Refineries running at full tilt to capture historic margins.

CNN

• Diesel crack spread: $102/barrel.

CNN

• U.S. regular-gas price: $4.07/gal, +30 % YoY.

CNN

• Diesel price: +48 % YoY.

CNN

• Jet fuel price: +70 % YoY.

CNN

• Exxon Mobil earnings: $160 million per day in the last quarter.

CNN

• Russian refining offline: ?40 % of capacity.

CNN

• Coal price in July: $131.85/tonne, up from $102.20 the previous year (Indonesia).

Coal Profits Surge Globally as Iran Conflict Disrupts Energy Markets

• Chinese EV exports (first half 2026): +131 % versus 2025.

The 'New Normal' for Energy Markets

• “This is man-bites-dog news. The market is screaming that we’re short,” — Bob McNally, founder and president of Rapidan Energy Group

CNN

• “Unless Middle East, China and/or Russia supply issues are resolved, diesel prices are likely to remain near cycle highs, with further upside risk if inventories continue to draw into the winter,” — Asian Development Bank, of America

CNN

Higher fuel costs have imposed an estimated $40 billion burden on U.S. consumers since the conflict began, according to Brown University’s Climate Solutions Lab, adding to inflation pressures. The surge is prompting “demand destruction,” though analysts say the effect is insufficient to rebalance the market.

CNN

Coal demand is reviving. South Africa’s Thungela Resources reported doubled half-year profits, with earnings per share rising from 1.92 rand to 4.80 rand. Several Asian nations have increased coal-fired electricity generation to offset strained oil and gas supplies.

Coal Profits Surge Globally as Iran Conflict Disrupts Energy Markets

The disruption is also accelerating a shift toward electric vehicles and renewables. Chinese EV exports have surged, and many Asian firms are replacing planned natural-gas power generation with renewables or repurposing gas turbines for data-center use.

The 'New Normal' for Energy Markets

Sources agree on the magnitude of price spikes but differ on long-term demand forecasts. Energy-Intel analysts project a permanent reduction in global oil and gas demand, while other outlets emphasize continued profitability for major oil majors in the near term. No definitive data on when the Strait of Hormuz will reopen or how quickly Russian refineries will recover is provided.

The 'New Normal' for Energy Markets

Bank of America cautions that inventory draws into the upcoming winter could push diesel prices higher if supply constraints persist. Russia’s export ban is scheduled to lift at the end of January 2027, and negotiations to reopen the Strait of Hormuz remain ongoing. The trajectory of fuel markets will depend on the resolution of these geopolitical bottlenecks and on how quickly alternative energy sources can scale to meet global demand.

The 'New Normal' for Energy Markets