AI Library
The Double Structure of Digital Sovereignty
Europe’s Departure from Palantir and the Chains of American Big Tech
Kim Kyung-jin, Attorney at Law
This is a record of 2026, when European intelligence agencies and defense ministries began removing analytics tools from America’s Palantir. It covers the replacement decisions made by France’s General Directorate for Internal Security (DGSI), Germany’s Federal Office for the Protection of the Constitution (BfV), and the Netherlands Ministry of Defense; the incident in which US export controls severed an ally’s ac…
New English Edition
Artificial Intelligence in Horticulture
Kim Kyung-jin, Attorney at Law
Across five chapters and ten sections, this book examines computer vision for crop diagnosis, harvesting robots and autonomous field systems, smart greenhouses and digital twins, precision irrigation and supply-chain quality control, high-throughput phenotyping, and predictive breeding.
New English Edition
Artificial Intelligence in Food Crop Agriculture
Kim Kyung-jin, Attorney at Law
Across six chapters and eighteen sections, the book examines digital agricultural infrastructure, remote sensing, crop diagnosis, yield forecasting, precision irrigation, genomics, molecular breeding, agricultural robotics, climate-smart agriculture, and global food security.
New English Edition
The Future of Forestry and Agroforestry
Kim Kyung-jin, Attorney at Law
Driven by Artificial Intelligence and Digital Innovation
Across five chapters and fifteen sections, the book follows satellites, drones, LiDAR, digital twins, forest-specific language models, wildfire and pest forecasting, forestry robotics, agroforestry, timber traceability, and forest carbon markets.
New English Edition
Smart Livestock Farming: AI Enters the Barn
Kim Kyung-jin, Attorney at Law
Sensors listen, cameras watch, and artificial intelligence helps farmers decide.
Across five chapters and fifteen sections, the book follows precision livestock farming from animal health and reproduction to robotic milking, virtual fencing, digital twins, methane reduction, welfare, and data ownership.
Table of Contents
Han Dong-hoon, Busan Buk-gu Gap: A Record of the 100 Days Before and After the Election (Mar. 26-Jul. 3, 2026)
Kim Kyung-jin
Table of Contents and 13 sections
From March 26 to July 3, 2026, this record follows the spring after expulsion, the Busan Buk-gu Gap by-election, victory as an independent, and the first bill submitted in the National Assembly.
Table of Contents
Artificial Intelligence and Medicine
Kim Kyung-jin, Attorney at Law
AI in clinical care, hospitals, education, and research
AI in medical imaging, risk prediction, treatment planning, hospital operations, education, and research, with patient safety, privacy, and accountability.
[AI Library] Chapter 19: Windfalls Lost to Smoke
The 2026 U.S.-Iran War and the Global Energy Crisis
Chapter 19: Windfalls Lost to Smoke
Kim Kyung-jin
The 2026 U.S.-Iran War and the Global Energy Crisis
Chapter 19: Windfalls Lost to Smoke
19.1 Russia's Opportunity
On February 28, 2026, as the United States and Israel's Operation Epic Fury struck Iran and the Strait of Hormuz began to close, energy officials in Moscow on the opposite side of the globe could not believe their eyes. The Brent crude price on their monitors rose from the 80-dollar range to break past 100 dollars in a single day. Before the first week of March ended, Brent crude had reached $108 per barrel, and Urals crude, Russia's main export grade, had crossed the $100 mark.
Just ten days earlier, Urals crude had been in a pitiful state. Under Western sanctions and an oil price cap, Urals crude sold for $28 per barrel cheaper than Brent crude. Between January and February 2026, Urals trading prices hovered between $53 and $59 per barrel. The oil price Russia's government had assumed when drafting its 2026 budget was $59 per barrel. Reality fell short of that figure. During the first two months of 2026, Russia's budget deficit reached $35 billion, and Sergey Vakulenko, an energy analyst at the Carnegie Russia and Eurasia Center, forecast that Russia's total 2026 budget deficit would exceed $100 billion.
Then the Strait of Hormuz closed. A shipping lane carrying 20 million barrels per day had been blocked.
Asia's major oil-importing nations, cut off from Middle Eastern petroleum, turned in unison. China, India, Thailand, Vietnam. Their gaze shifted toward Russia. China's imports of Russian crude rose 22 percent in March compared to the previous month. India surged 82 percent. Brazil jumped 32 percent, and Singapore nearly tripled. Luke Wiekenden, an analyst at the Centre for Research on Energy and Clean Air (CREA), explained to CBS News: "The 10 to 20 percent discount attached to Russian crude oil completely disappeared. It is now trading at almost the same level as Brent crude."
The numbers told the story. According to CREA data, in the first 24 days after the Iran war broke out, Russia's average daily oil export revenue reached 388 million euros. This was 20 percent higher than the February average. The Financial Times called Russia the war's "biggest beneficiary" and reported that daily revenues increased by $150 million. Bloomberg's vessel tracking data was more striking. During the week through March 15, Russia's maritime crude export revenue reached approximately $2.07 billion, an increase of $890 million from the previous week. This was the largest weekly increase since Russia's full-scale invasion of Ukraine in February 2022.
The Kremlin did not hide this windfall. Spokesman Dmitry Peskov publicly acknowledged that "our oil companies are capturing additional revenues in the current price environment," and President Putin encouraged oil producers to "take maximum advantage of this upswing." However, he attached the caveat that this spike was "temporary." How prescient that qualification would prove to be became clear just days later.
The arithmetic of the energy market was ruthlessly clear. Russia had not fired a single shot at the Strait of Hormuz. The war unfolding in the Middle East was not Russia's war. Yet that war presented Russia with a historic windfall in crude prices. The coffers that had grown empty from the costs of invading Ukraine were refilling thanks to another nation's conflict. President Zelenskyy summarized the situation this way: "According to our intelligence, with sanctions and our long-range strikes, Russia was expecting a deficit exceeding $100 billion in 2026 alone. Yet in the past 14 to 15 days, they earned about $10 billion. It means they can cover that deficit if the war continues."
General Richard Shirreff, former deputy commander of NATO's European forces, appearing on CNBC, offered an analogy: "The Russian economy is like a climber in the death zone above 8,000 meters. The body is consuming itself, and there will be fatal damage in the long term. But at this moment, they are gaining economically." A windfall earned in the death zone. This was the precise coordinate of Russia's paradox in early March 2026.
19.2 America's Easing of Sanctions on Russia
On the night of March 12, 2026, a document appeared on the U.S. Treasury Department's website. Its official name was a General License. The content was this: Effective March 12, the purchase and delivery of Russian crude oil and petroleum products already loaded on vessels and at sea would be permitted for 30 days through April 11.
Treasury Secretary Scott Bessent called this measure a "narrowly designed short-term action." He added: "It applies only to oil already in transit, and it will not provide substantial financial benefits to the Russian government."
Market reaction was the opposite of his words. Indian refiners moved immediately after the license appeared. The United States had granted India a separate 30-day exemption a week earlier on March 5, and from that point, Indian purchases of Russian crude were already surging. According to CREA data, India's average daily import of Russian crude during the first three weeks of March increased 82 percent compared to the February average. Buyers who had previously paid discounted prices while nervously watching over their shoulders for sanctions risks now began confidently purchasing Russian crude with permits from the U.S. government.
Bloomberg's data collided head-on with Bessent's language. The $28-per-barrel penalty (in effect a discount) that sanctions had imposed on each barrel of Russian crude shrank rapidly after the license announcement and fell to $4.80 on March 13, the lowest in four months. Urals crude had broken past $100 and was selling at nearly double the $59 price Russia's government had assumed in its budget. As noted earlier, maritime export revenues rose by $890 million in a week.
The structure of this situation can be summarized in one sentence: The United States bombed Iran, the Strait of Hormuz closed, oil prices spiked, and to lower prices, the U.S. eased sanctions on Russia, filling Russia's coffers.
President Zelenskyy directly criticized the measure at a joint press conference with French President Emmanuel Macron in Paris. "This easing alone could provide Russia with approximately $10 billion for war. This does not help peace." He added another point: "Russia spends oil sales revenues on weapons. Those weapons are all aimed at us. Easing sanctions so that more drones fly later,in my view, that is not the right decision."
German Chancellor Friedrich Merz spoke more bluntly during a visit to Norway. "Six of the G7's members expressed very clear views that this is the wrong signal. The U.S. government decided differently. This is now a price issue, not a supply issue. I want to know what additional motivation drove the U.S. government's decision."
Kari Hierman, senior fellow at the Brookings Institution, analyzed the situation as a clash of three priorities: low gasoline prices, war with Iran, and pressure on Russia to end the Ukraine war. "The United States chose low gasoline prices and the Iran war. It is the kind of decision you have to make in a world where economic statecraft plays a large role."
Oil was not the only issue. With the Strait of Hormuz closed, supplies of Qatar's fertilizer feedstock had been cut off. Spring planting season was approaching in America's Midwest. Without fertilizer, farming cannot proceed. The United States had to shift course and import fertilizer from its adversary Russia. Russian helium, aluminum, and nitrogen fertilizer exports were also contributing to national revenue. The scale was smaller than oil, but the direction was the same. While American bombs fell on Iran, Russian bank accounts were being filled.
Linas Kojala and Vytautas Lesevičius of the Atlantic Council warned of the danger of this paradox in an analysis dated March 20. "Emergency measures for short-term market management can be understood. But they must be precisely that. Temporary, narrow, and limited to cargo already in transit. Converting this into broader sanctions relief would be rewarding Russia at the very moment when financial pressure is finally beginning to work in the Ukraine war." They identified a vicious cycle: once easing begins, it pulls discussion toward broader political negotiations with Moscow, which naturally leads to discussion of additional sanctions lifting, and the two tracks feed each other in a cycle difficult to escape.
Criticism erupted within the United States as well. Senator Jean Shaheen, a Democrat, issued a formal statement: "While Putin helps Iran target U.S. forces in the Middle East, the President is filling the Kremlin's war chest. Instead of tightening Russia's faltering economy, the war the President recklessly started is delivering a windfall to Putin, and American households face higher prices."
As examined earlier in Part Four, the economic impact of the Strait of Hormuz blockade produced an unintended second ripple here. The first ripple was a spike in oil prices and an energy crisis in Asia. The second ripple was the internal collapse of the sanctions regime against Russia that the United States itself had built. The world's mightiest nation could not sustain an economic war against a rival in the face of a physical shortage of 20 million barrels per day.
An Axios analysis captured the heart of the situation: "If you relieve sanctions, the stigma disappears too. Once gone, that stigma is hard to restore." When the 30-day grace period expired on April 11, could the U.S. government truly restore sanctions to their original state? This was a question that Washington and Brussels policymakers had not answered by mid-March.
19.3 Yet Oil That Cannot Be Exported
Between the night of March 22 and the early morning of March 23, 2026, the sky over the Leningrad region turned red. Two hundred forty-nine Ukrainian drones flew toward Russian territory through the night, with many striking precisely at Primorsk Port, about 130 kilometers west of Saint Petersburg. Primorsk is Russia's largest Baltic Sea crude oil export terminal. Daily export capacity is one million barrels of crude and 300,000 barrels of diesel. It is the terminus of the Baltic Pipeline System (BPS) operated by Transneft and a major departure point for the so-called shadow fleet carrying Russian oil to avoid sanctions.
The drones struck fuel storage tanks and crude loading infrastructure simultaneously. According to satellite images, at least five of eighteen visible tanks were damaged. Leningrad Region Governor Alexander Drozdenko wrote on Telegram that "fuel tanks were damaged and fire broke out." As firefighters worked to extinguish the blaze, port personnel were evacuated. Ukraine's General Staff announced: "The Transneft-Primorsk oil terminal was struck, and damage to both the tank farm and crude loading infrastructure was confirmed."
According to vessel data confirmed by Bloomberg, tanker loading at Primorsk ceased immediately. Satellite imagery from NASA's Fire Information for Resource Management System (FIRMS) detected fires at both the crude loading terminal and the petroleum products terminal. The fire burned for more than a day.
Two days later, between the night of March 24 and 25, a second strike came. The target this time was Ust-Luga port, about 80 kilometers south of Primorsk. Ust-Luga is another critical Russian Baltic Sea export port, handling approximately 700,000 barrels of crude per day and hosting Novatek's gas condensate and petroleum products processing facilities. During 2025, 33.9 million tons of petroleum products were exported from Ust-Luga, and 16.8 million tons from Primorsk. Combined, the two ports handled two million barrels of Russian crude per day bound for world markets.
Ukraine's Security Service (SBU) and General Staff confirmed that long-range drones from the Alfa Special Operations Center, flying more than 900 kilometers, struck Novatek's petroleum products facilities at Ust-Luga. Storage tanks and loading equipment were engulfed in flames. The column of fire and smoke was observed from Saint Petersburg itself, and Russia's Emergency Ministry issued an "air pollution alert" to residents. Pulkovo International Airport suspended takeoffs and landings for hours due to drone threats.
And before a day had passed, a third strike followed. Between the night of March 25 and 26, drones targeted the Kirishi refinery in the same Leningrad region. The facility, formally known as KINEF (Kirishinefteorgsintez), is owned by Surgutneftegas and is Russia's second-largest refining facility. With an annual processing capacity of about 20 million tons, or roughly 350,000 barrels per day, it handles 6.6 percent of Russia's total crude refining, and in 2024 produced two million tons of gasoline, 7.1 million tons of diesel, 6.1 million tons of fuel oil, and 600,000 tons of bitumen.
According to Reuters, drones struck two primary processing units and multiple secondary facilities with fire, bringing the refinery to a complete halt. Ukraine's General Staff later issued detailed damage assessment: the primary crude distillation units ELOU-AVT-2 and ELOU-AVT-6 were damaged, along with bitumen production facilities, hydroprocessing units, and the gas fractionation system. An industry official said "the repair timeline is difficult to estimate."
Five days, three strikes. Primorsk, Ust-Luga, Kirishi. All three were in the Leningrad region, and all were more than 800 to 1,000 kilometers from the Ukrainian border. It was an operation testing the maximum reach of Ukrainian long-range suicide drones.
The timing of the attacks carried clear strategic intent. President Zelenskyy told Reuters: "International pressure on Russia is decreasing." The United States had eased sanctions, Russia's coffers were filling from the oil price spike, and international attention on the Ukraine war had shifted to Iran. Zelenskyy laid out the logic of the attacks more directly in a CNN interview: "We responded to their attacks on energy infrastructure. We responded with a powerful strike reducing Ust-Luga's capacity. After our strike, only 40 percent of that facility's capacity remains."
The Baker Institute at Rice University, in a February 2026 report, conceptualized this strategy with the term "Kinetic Sanctions." Legal sanctions create price discounts, and those discounts present opportunities for arbitrage to intermediaries operating shadow fleets and paper companies. Starting new paper companies and changing a tanker's flag is quick and cheap. But replacing energy assets destroyed by explosives is slow and expensive. "Kinetic sanctions through large-scale physical strikes can effectively isolate Russia from the market, and there is a crucial strategic impact there."
If sanctions were a war on paper, drones were a war in iron and gunpowder. Sanctions that the United States and Europe enforced slowly through courts and compliance divisions, Ukraine enforced in hours through drone operations teams. If crude oil physically cannot reach markets, shadow fleets are meaningless no matter how numerous. The window for arbitrage closes.
Reuters tallied the results in a March 25 article. Ukrainian drone strikes, ship seizures, and Druzhba Pipeline closures combined had halted roughly 40 percent of Russia's total oil export capacity, approximately two million barrels per day. Reuters called it "the most severe oil supply disruption in modern Russian history."
Break down how that 40 percent figure was composed. The Baltic ports of Primorsk and Ust-Luga, struck by drones, repeatedly suspended loading. The Black Sea port of Novorossiysk had schedule disruptions following drone attacks in early March. The Ukrainian section of the Druzhba Pipeline, damaged by Russian airstrikes on January 27, had halted oil shipment to Hungary and Slovakia entirely. Added to this, European navies detaining Russian shadow fleet tankers created additional maritime bottlenecks. Russia's remaining major export routes were the pipeline to China and the Kozmino port in the Far East, whose combined exports totaled approximately 1.9 million barrels per day.
Primorsk, according to March 26 Bloomberg reporting, partially resumed loading when the Suezmax tanker Minerva Georgia docked, but Transneft said it was trying to reroute crude through other channels. Yet the resumption was short-lived. Between the night of March 26 and 27, Ukrainian drones struck both Primorsk and Ust-Luga again simultaneously. It was the third attack in five days. NASA satellite data confirmed fresh fires at both ports. Pulkovo Airport suspended operations again.
Euromaidan Press, analyzing this attack pattern, reported: "This pace suggests Kyiv is trying to destroy Russia's Baltic Sea oil export ports to an irreplaceable degree."
Drones flew not only over Russian territory. At 3:43 a.m. on March 25, a drone crashed into the smokestack of the Auvere coal-fired power plant in Ida-Viru County in eastern Estonia. It had come from Russian airspace. Estonian Prime Minister Kaja Kallas announced that the drone apparently lost its way during the Ust-Luga strike on Russia. The same day, a drone from Russian airspace crossed into Latvia and crashed with an explosion near the border. No injuries were reported. Two days earlier, on the night of March 23, a Ukrainian drone had also crossed over Belarusian airspace and crashed in the Varėna region of southeastern Lithuania.
All three Baltic states experienced drone intrusions within 48 hours. Ukrainian drones fell on NATO member territory. Russian GPS jamming and spoofing were identified as the cause. When Russian electronic warfare equipment disrupts or falsifies satellite navigation signals, drones lose their position or fly on incorrect coordinates. In a situation where the distance from the Ukrainian border to the target spans 1,000 kilometers, a small navigation error can be amplified into a deviation of tens of kilometers.
Russian state TV broadcast claims that "the Baltic states opened their airspace for Ukrainian drone flights." The Baltic states flatly denied this and requested air defense system support from the European Union. Estonia's defense commander acknowledged that intercepting drones near the Russian border faces "legal and tactical constraints." "We cannot engage drones in any place where there is even the slightest risk of unintended escalation." Drone debris over the Baltic Sea was evidence that this war was physically spreading beyond the Russian and Ukrainian border into NATO's eastern flank.
The Russian government's response was twofold. First, the Defense Ministry announced it had shot down 389 Ukrainian drones overnight, but the fires at the port did not stop. Second, Vice Premier Alexander Novak, after consulting with oil companies, pushed forward a plan to completely ban gasoline exports beginning April 1. This ban, reported by state news agency TASS, had been implemented once in September 2025. That time, too, it was because domestic gasoline supply ran short due to Ukrainian strikes on refineries. Kommersant explained the reason for this ban as follows: as export prices surged, producers diverted gasoline to foreign markets instead of the domestic market, creating a shortage in domestic supply.
Here the complete circuit of paradox emerges. The Iran war drove up oil prices. Russia gained a historic opportunity to sell oil at high prices. The United States even lifted sanctions on Russia to try to lower prices. Yet Ukrainian drones burned the export ports, making it impossible to ship oil. There was expensive oil to sell, but the port to load it onto ships was burning. To make matters worse, the Druzhba pipeline had been cut off since January, and European navies were seizing shadow fleet tankers.
Zelensky clarified the logic of this strategy in a press conference in mid-March. "Without sanctions, the only thing fighting Russia's moneymaking is Ukrainian weapons. So our strategy does not change. If Ukraine does not counterattack, no one will fight Russia's economy."
Al Jazeera analyzed Ukraine's strikes in a March 27 report as "designed to prevent Russia's war chest from being refilled." Brent crude stood at $108.01 per barrel as of March 26. On February 27, the day before the Iran war erupted, it was $70.71. It rose 53% in a month. If Russia could only sell oil at this price, its fiscal deficit would vanish. The $100 billion deficit Zelensky mentioned would be covered. Putin would secure funds to continue the war. For Ukraine, that was the one thing it had to prevent.
Russia still had other export routes. Pipelines to China and far eastern exports through Kozmino port. About 1.9 million barrels a day. This volume was beyond drone range. Russia's oil exports did not stop completely. But the blockade of the western route meant most maritime exports to Europe, India, and Africa were cut off. There were physical limits to how much could be loaded in Kozmino.
On March 29, Ust-Luga came under drone attack again. Same port, same facilities, same pattern. Fires broke out again, and shipping halted again. Another attack was reported on March 31. Bloomberg reported that Ust-Luga had suffered "additional damage."
This is why the chapter is titled "Windfalls Lost to Smoke." What the Iran war delivered to Russia was a historic opportunity for high prices. What the U.S. sanctions relief added was a license to sell oil legally. But what Ukraine's long-range drones took away was the physical passage itself to send that oil to world markets. The price had risen. Permission was granted. But the ports were burning. The black column of smoke rising over the Baltic Sea was the very image of Russia's windfalls disappearing.
Bakulenko from the Carnegie Center acknowledged to CNBC that Russia's short-term gains from the Iran war were "palpable," yet diagnosed that they did not address structural crisis in the Russian economy. Inflation stood at 5.9%, and the central bank's base rate remained fixed at 15% with no decline in sight. Conversion to wartime military production, rising food prices, labor shortages, cumulative sanctions effects. Money earned from high prices was insufficient to offset all of this.
General Syrskyi of NATO's simile comes to mind again. The death zone at 8,000 meters above sea level. The body is consuming itself. High oil prices amounted to handing one oxygen tank into his hands. But even that tank had a hole. The hole was drilled by a drone worth tens of thousands of dollars. The windfall that the Iran war gifted was scattering into thin air along with the smoke rising from Baltic ports.
Kim Kyung-jin, AI specialist and attorney
Specialist in AI law and policy, former parliamentarian, author of numerous works
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Kim Kyung-jin
Attorney · Former Member of the National Assembly · AI Policy Researcher
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