The 2026 U.S.-Iran War and the Global Energy Crisis

Chapter 20: The Paralysis of 40 Percent

20.1 Simultaneous Strikes on Russia's Three Major Western Export Ports

On the night of March 22, 2026, the sky across the Gulf of Finland turned orange. Heikki Autto, chair of the Finnish Parliamentary Defense Committee, told Reuters that he witnessed with his own eyes a massive black column of smoke rising toward Primorsk from the Finnish coast. Jukka-Pekka Lumilahti, commander of the Finnish Gulf Coast Guard, described it as "a massive fire, with a massive volume of smoke." The source of that smoke was Primorsk, Russia's largest Baltic oil loading terminal.

Primorsk is the terminus of the Baltic Pipeline System. It has nine berths capable of loading one million barrels of crude per day, eighteen storage tanks with a capacity of fifty thousand tons each, and annual processing capacity of up to seventy-five million tons. It is a key export hub for Russian Urals crude and low-sulfur diesel, and the departure point for the shadow fleet that carries oil to India and China to evade Western sanctions. Ukrainian drones struck this port's tank farm and loading infrastructure with precision. Ukraine's General Staff announced via Telegram that "damage has been confirmed to both the tank farm and loading infrastructure of the Transneft-Port Primorsk oil terminal."

The fire could not be contained. Days passed, and the blaze continued to burn, with loading operations completely halted.

Before the fire at Primorsk was even extinguished, a second strike followed. In the early morning hours of March 25, the port of Ust-Luga, located on the coast of the same Leningrad Oblast, came under drone attack. Ust-Luga is another major oil export hub operated by Transneft. It processes approximately seven hundred thousand barrels of crude per day and exported thirty-two million nine hundred thousand metric tons of petroleum products during 2025 alone. Novatek PJSC's gas condensate processing facility is also located there. Ukraine's General Staff confirmed that drones struck Novatek's petroleum product facilities, with fires breaking out in storage tanks and loading equipment.

Bloomberg reported that "Ukraine conducted its most intensive aerial assault in over a year, setting fires at portions of the Ust-Luga port facilities." Alexander Drozdenko, governor of Leningrad Oblast, wrote on Telegram that "the port sustained damage," but he did not disclose the specific extent of the damage. Instead, the numbers spoke for themselves. The smoke rising from Ust-Luga's thirty-three fuel storage tanks was observed from dozens of kilometers away off the Finnish coast, according to reporting by Helsingin Sanomat.

But this was not the end. Ukrainian forces repeated second and third assaults timed precisely to when Russian firefighting crews attempted to extinguish the fires and resume loading. Primorsk and Ust-Luga briefly resumed loading operations early in the week, but when drones swarmed again on Wednesday night, operations halted once more. According to Reuters, this was "one of the largest aerial assaults on Russian oil export facilities in four years of war."

While fires raged in the Baltic, the same was happening in the Black Sea.

In early March, Novorossiysk, Russia's largest Black Sea export port, came under drone attack by Ukraine's Security Service (SBU). Novorossiysk is a port capable of loading approximately seven hundred thousand barrels of crude per day and, since the naval base in Crimea was neutralized by Ukrainian drones, has become the primary deployment site for Russia's Black Sea Fleet. Drones operated by the SBU's Alpha Special Operations Center struck the port's oil terminal, warships, and air defense systems simultaneously. Mayor Andrey Kravchenko of Novorossiysk confirmed that explosions continued for hours, and video recorded by local residents showed flames shooting from port terminals and the sound of explosions echoing across the city.

Novorossiysk's Sheskharis oil terminal is Russia's largest petroleum transshipment facility in the south. The Caspian Pipeline Consortium (CPC) terminal is also located here. The CPC handles the majority of Kazakhstan's crude exports, and U.S. oil majors Chevron and ExxonMobil hold stakes in it. Approximately one percent of global oil supply passes through this terminal. When Ukraine struck this terminal in November 2025, the U.S. State Department sent a demarche to Ukraine's ambassador to the United States stating "refrain from attacking American economic interests." But in March 2026, with oil prices spiking from the Iran war and the Strait of Hormuz blockaded, Ukraine's strikes did not cease.

Following the assault on Novorossiysk, port authorities restricted nighttime vessel passage and permitted only limited arrivals and departures during daylight hours. The port's export efficiency plummeted to below fifty percent.

That these three ports were struck simultaneously was no coincidence. Primorsk and Ust-Luga are twin hubs connected by the Baltic Pipeline System. According to Bloomberg's analysis of shipping data, these two ports were processing approximately forty-five percent of Russia's maritime crude exports, or 1.72 million barrels per day, right up until the attacks. Add Novorossiysk's seven hundred thousand barrels, and the combined processing capacity of these three ports alone exceeds half of Russia's total maritime oil exports. Ukraine struck all three simultaneously, repeatedly, and in succession before defensive measures could be restored.

Ukraine's long-range drone technology, which had evolved steadily since 2025, made this operation possible. Drones that once flew only in straight lines using pre-programmed coordinates now performed zigzag flight patterns and evasive maneuvers under real-time operator control. The steel mesh netting and defensive structures Russia had installed around critical storage facilities proved useless against swarming drone tactics. When leading drones became entangled in the defensive net, subsequent drones exploited those gaps to strike the vulnerable points of tanks and pump installations with precision.

Russia's Defense Ministry announced that it had shot down 389 Ukrainian drones in a single night. But regardless of the number shot down, Primorsk and Ust-Luga were burning. The question was not how many had been destroyed, but how many had reached their targets.

On the night of March 25, two drones launched by Ukraine veered off course and fell in Estonia and Latvia. In Estonia, one struck a power plant but caused no damage. Latvian authorities announced that "a Ukrainian drone appears to have deviated from its flight path." Smoke visible from the Finnish coast over 1,000 kilometers from Primorsk, with drones falling on neighboring territory,a scene that illustrated just how far the physical radius of this war had expanded.

That same week, Ukraine did not limit itself to targeting Baltic ports. The Saratov refinery, the Bashneft-Ufaneftekhim refinery in the Bashkortostan Republic, and the Kirishi refinery came under successive air strikes. The Kirishi refinery handles 6.6 percent of Russia's total refining capacity and has processing capabilities of approximately seventeen million seven hundred thousand metric tons annually, or about three hundred fifty thousand barrels per day. Bashneft-Ufaneftekhim is a critical facility supplying fuel and lubricants to Russian forces and lies some 1,400 kilometers from the Ukrainian border. Ukrainian drones traversed this distance without difficulty.

Ports burned, refineries shut down, and export terminals were destroyed. In mere days, Russia's western coastal oil export infrastructure had turned to ash, and tankers began avoiding the ports entirely due to fire hazards.

MarineTraffic ship-tracking data illustrated the result in numbers. More than fifty tankers sat waiting in the Gulf of Finland with Primorsk or Ust-Luga marked as their destination. They had come to load crude, but the ports they were meant to load at were burning.

20.2 Two Million Barrels Per Day Offline

In its March 25 report, Reuters calculated as follows: the halting of loading at Primorsk and Ust-Luga, the delay in loading at Novorossiysk, and the virtual cessation of exports to Hungary and Slovakia via the Druzhba Pipeline. Adding all of this together, approximately forty percent of Russia's total oil export capacity,roughly two million barrels per day,was currently offline. Reuters described this as "the most severe disruption to oil supplies in modern Russian history."

To understand this figure, one must examine the timing.

On February 28, 2026, as U.S. and Israeli strikes on Iran shut down the Strait of Hormuz, international crude prices began to soar. Brent crude jumped from $70.71 per barrel on February 27 to $108.01 on March 26. With a critical chokepoint through which one-third of global maritime oil shipments pass suddenly closed, the value of remaining supplies spiked. Russian Urals crude, which had previously traded at a substantial discount to Brent, saw that discount gap narrow sharply following the Iran war, eventually trading at near parity to Brent.

Under normal circumstances, this would have been a windfall opportunity for Russia, struggling with cash shortages under Western sanctions. Fortune cited Usha Haley, a professor of international business at Wichita State University, reporting that "Russia stands as the largest short-term beneficiary of the Iran conflict." Professor Haley stated, "This amounts to a rescue of Russia's oil revenues, which had been in decline for an extended period."

But Ukraine destroyed Russia's export infrastructure physically at precisely this moment.

No matter how high prices climb, it does nothing if the ports needed to ship crude are burning. Russian oil companies had to declare force majeure on supplies from Baltic ports,formally acknowledging a complete state of emergency rendering contractual oil deliveries impossible due to war and circumstances beyond their control.

Even before the Iran war, warning lights had been flashing in the Russian economy. According to the Washington Post, Kremlin officials warned Putin that "a financial crisis could strike by summer," citing weakened oil revenues and a ballooning fiscal deficit. A Moscow businessman stated that "a crisis could hit in three to four months," noting that "restaurants are shutting down and thousands of workers are being laid off." Russia's share of oil and gas revenues in the budget was projected to fall from more than fifty percent in 2022 to twenty-three percent by 2026.

Against this backdrop, the forced halt of two million barrels per day in exports occurred.

With export routes blocked, crude began backing up inland. When storage tanks reach saturation, shutting in wells becomes the only option. Restarting a well that has been shut down in Siberia's frigid environment demands substantial expense and months of time. A single drone costs only tens of thousands of dollars, yet the infrastructure paralysis and lost production capacity it causes carries a price tag in the hundreds of millions.

The shock reverberated to the front lines. Russian forces require vast quantities of refined fuel to operate mechanized units along the Ukrainian front. The cascade of refinery fires created bottlenecks in military logistics. In the Moscow region, over four hundred fifty thousand residents experienced blackouts due to power grid damage inflicted by Ukrainian drones. The war at the front and the economy in the rear trembled simultaneously.

On March 27, Russian Deputy Prime Minister Alexander Novak ordered the Energy Ministry to prepare legislation banning all gasoline exports beginning April 1. Bloomberg reported that "Russia plans to ban gasoline exports to meet domestic demand amid soaring international fuel prices caused by the Iran war." The embargo was scheduled to remain in place for a minimum of four months, through July 31.

A nation once called "the world's second-largest oil exporter" forced to bar exports to secure gasoline for its own population. For Russia, this was not merely a trade disruption but a signal that the financial foundation supporting the war was running dry.

In fact, this was not Russia's first gasoline export ban. Such measures had been implemented intermittently since March 2024 and were extended in October 2025 through the end of February 2026. As Ukrainian drones intensified strikes on Russian refining facilities starting in the second half of 2025, twenty percent of Russia's refining capacity went offline simultaneously between August and October. At that time, gasoline shortages were first reported in Crimea and Russia's Far Eastern regions. When ports came under attack in March 2026, the crisis expanded to an entirely different dimension.

According to the Centre for Research on Energy and Clean Air (CREA) analysis for February 2026, Russia's daily fossil fuel export revenue was 492 million euros. Of this, crude oil export revenue accounted for 232 million euros. With forty percent of export capacity paralyzed, a substantial portion of this revenue was evaporating. The International Energy Agency (IEA) assessed that Russia's oil revenues had fallen to their lowest level since the war began in 2022.

Consider the timing of Ukraine's assault. At the precise moment the Strait of Hormuz was blockaded, cutting off twenty percent of global oil supply, an additional forty percent of Russian oil export capacity was paralyzed. The global oil market faced pressure from two directions simultaneously. The crisis from the Middle East converged with the crisis from the Baltic.

Al Jazeera characterized the situation as follows: Brent crude rose from $70.71 on February 27 to $108.01 on March 26. And Ukraine's strikes appeared "designed to prevent the Kremlin from replenishing its war chest."

The essence lies in this single sentence. When oil prices rise, Russia makes money. Ukraine ensured that Russia could not profit in the very moment oil prices surged.

20.3 Druzhba Pipeline Damage

Two months before Baltic ports were consumed by flames, another artery was severed deep inland.

On January 27, 2026, a Russian drone struck pipeline infrastructure near the Brody oil hub in western Ukraine. The Brody hub is a critical juncture where the southern branch of the Druzhba Pipeline, the "Friendship Pipeline," passes through. The Druzhba Pipeline, one of the world's longest crude pipelines in operation since 1964, stretches over 4,000 kilometers from eastern Russia through Ukraine and Belarus to Poland, Hungary, Slovakia, Czech Republic, and Germany.

Two days later, on January 29, Ukrainian Foreign Minister Andrii Sybiha posted photographs of the destroyed Brody hub on social media. Burning infrastructure, destroyed high-pressure pumps and control systems. Minister Sybiha formally attributed this damage to Russian attacks and notified international partners of force majeure circumstances that rendered crude transportation physically impossible. Sybiha stated that he was releasing the photographs preemptively "in anticipation of Hungary once again protesting the Russian oil transport issue."

The flow of crude oil through the Druzhba southern branch has come to a complete halt.

Two countries dependent on energy from this pipeline took a direct hit: Hungary and Slovakia. Both countries had received exemptions from the European Union's sanctions on Russian oil and continued importing Russian crude through the Druzhba pipeline. While the EU's share of Russian crude imports fell from 26% in 2021 to about 3%, Hungary actually increased its dependence from 61% to 86%. Slovakia depended almost entirely on Russian crude oil, and its sole domestic refinery, Slovnaft, was designed specifically for Russian crude.

As the pipeline stopped, diplomatic cracks began to show.

Slovak Prime Minister Robert Fico made public his phone conversation with President Zelensky on February 27. Fico argued that Slovakia had a 'legal right' to import Russian oil until 2027 under the EU exemption rules, while emphasizing the severe economic damage from the supply cutoff. More than that, Fico threatened to withdraw Slovakia's support for Ukraine's EU membership. And Slovakia halted emergency electricity exports to Ukraine.

Hungarian Prime Minister Viktor Orban resisted more forcefully. Hungarian Foreign Minister Peter Szijjarto accused Ukraine of deliberately delaying pipeline repairs 'for political reasons,' while requesting Croatia to supply alternative Russian oil through the Adria pipeline. On February 20, Hungary declared that it would exercise veto power over the EU's 90-billion-euro aid package for Ukraine unless crude oil supplies through the Druzhba pipeline were restored.

The EU found itself in a difficult position. The European Commission and the President of the European Council issued a joint statement on March 17, declaring that they would provide technical support and funds to Ukraine to ensure Hungary and Slovakia's energy security. Alternative supplies of non-Russian crude through Croatia's Omisalj terminal had begun, and the EU Oil Coordination Group announced on February 25 that there was no immediate threat to Hungary and Slovakia's energy security. This was on the basis that both countries had begun releasing strategic reserves and using alternative supplies through the Adria pipeline.

But this was not merely an energy issue. Former Slovak Foreign Minister Miroslav Wlachovsky told CGTN in an interview, 'This is not simply an energy problem but a geopolitical one, and a question of solidarity and EU cohesion.'

And a month later, on the night of February 22-23, Ukraine moved.

A long-range kamikaze drone from Ukraine's Security Service (SBU) struck the Kaleykino crude pumping station in the Almetyevsk region of Russia's Tatarstan Republic. Located about 1,200 kilometers from Ukraine's border, this facility was a critical hub of the Druzhba pipeline network, blending crude oil from Western Siberia and the Volga region before sending it to Europe. Local residents reported that after six to seven powerful explosions, large fires broke out in two storage tanks, each with a capacity of 50,000 cubic meters.

Wikipedia's entry on the '2026 Slovakia-Ukraine Oil Dispute' records this event as follows: 'Ukrainian officials characterized this operation as part of a systematic effort to reduce Russian oil revenues, and this strike further heightened diplomatic tensions with Hungary and Slovakia, which were already facing pipeline supply disruptions.'

The structure of this complicated situation can be summarized as follows. On January 27, Russian drones destroyed Druzhba pipeline infrastructure in Ukrainian territory. This cut off crude supplies to Hungary and Slovakia, and both countries blamed Ukraine and exerted diplomatic pressure within the EU. And a month later, Ukraine destroyed a Russian-side pumping station of the Druzhba pipeline deep in Russian territory.

Ukraine's logic was as follows. Russia destroyed the pipeline first. Hungary and Slovakia should blame Russia, not Ukraine. And Ukraine has the right to cut off Russia's war funding.

Hungary and Slovakia offered a different logic. The delay in pipeline repair is Ukraine's deliberate negligence. The EU should pressure Ukraine to normalize oil flows. And Ukraine's destruction of pipeline facilities in Russian territory is holding energy security hostage.

The European Commission proposed sending an inspection team to investigate the pipeline damage. Ukraine allowed access for the inspection team, but no substantive on-site inspection took place by the end of March. Euractiv reported that among EU diplomats, comments emerged such as 'We cannot understand what game Ukraine is playing.'

One drone destroyed Russia's pumping station, and Russian drones destroyed pipeline infrastructure on Ukrainian territory. These two instances of physical destruction tested and fractured political alliances within Europe. Energy weaponization was no longer Russia's exclusive domain. Ukraine and Hungary alike were using energy as geopolitical leverage in their own ways.

20.4 European Navy Seizures of Tankers

As ports burned and pipelines were severed, another front was opening at sea.

Russia's shadow fleet. A fleet of aging tankers mobilized by Russia to circumvent Western sanctions and the $60-per-barrel price cap set by the G7. By switching off the Automatic Identification System (AIS), flying false flags, changing ship names, and frequently changing registration countries, Russia transported Russian crude oil to India and China. This fleet, which numbered 600 vessels at the start of the war in 2022, had grown more than threefold by 2025, and as of February 2026, 1,337 vessels were listed in the shadow fleet registry maintained by the Ukrainian government. Russia was transporting about 60 percent of its maritime oil exports through this network of illegal sanctions evasion.

For years, the West's response remained limited to paper sanctions. Insurance refusal, sanctions list designation, port service bans. But the tankers kept sailing. The price cap was nearly ineffective because the ceiling for oil products was set as high as $100 per barrel, and workarounds through special purpose vehicles (SPVs) were rampant.

In 2026, the situation changed.

From paper to physical action, from legal mechanisms to military seizures. European navies took direct action at sea.

France was first. On January 22, 2026, the French Navy seized the Russian shadow fleet tanker Grinch in the Mediterranean Sea. This was an action based on Article 110 of the UN Convention on the Law of the Sea (UNCLOS). The vessel was flying the Mozambique flag, but it was confirmed to have departed from the Russian port of Murmansk. President Emmanuel Macron directly linked this seizure to the war in Ukraine, stating that 'the shadow fleet's activities contribute to financing the invasion of Ukraine.'

On February 28, Belgian forces carried out Operation 'Blue Intruder' in the North Sea. They seized the Russian shadow fleet tanker Ethera. In this operation officially confirmed by Belgian Defense Minister Theo Francken, Belgian special forces fast-roped from NH-90 naval helicopters and subdued the vessel. French forces provided support. The Ethera was flying the Guinea flag, but it was revealed to be a false flag, and 45 violations were identified. Belgian authorities imposed a 10-million-euro bail.

The same month, Swedish Coast Guard forces subdued the tanker Sea Owl I, which was sailing under the Comoros flag in the Baltic Sea. The 228-meter vessel was suspected of using a false flag, and this was the second such seizure in a week.

On March 25, Britain took decisive action. The office of Prime Minister Keir Starmer announced that British military and law enforcement would be authorized to board and seize shadow fleet vessels subject to sanctions if they passed through British territorial waters and exclusive economic zone. All sanctioned tankers passing through the English Channel became targets for detention. It was, in effect, a declaration of maritime blockade.

And the United States. In January 2026, the U.S. Navy and Coast Guard seized the Russian shadow fleet tanker Marinera in the Caribbean Sea. A remarkable scene unfolded in this incident. The crew of the pursued tanker suddenly began painting the Russian flag on the hull. After hastily registering with the Russian maritime registry, the Russian government requested that the United States halt the pursuit and even dispatched naval vessels. The United States, with support from British forces, carried out the seizure anyway. International maritime law experts evaluated this as an unprecedented event in which the shadow fleet 'emerged from the shadows to seek Russian protection.'

A shocking fact emerged during these seizure operations. According to AFP's February 2026 report, when French authorities boarded the shadow fleet tanker Boracay, two Russian security personnel were discovered. One of them was a former member of the Wagner Group. In 2025, Sweden's amphibious corps (Amf) also reported similar findings. Armed personnel in uniform, acting as 'additional crew members,' had been aboard shadow fleet vessels and were photographing infrastructure such as bridges. The presence of Russian paramilitary operatives on civilian merchant vessels provided European nations with grounds to treat these ships as military threats.

Centered on the Baltic and North Seas, 14 European coastal nations issued a joint warning letter. Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, the Netherlands, Norway, Poland, Sweden, the United Kingdom, and Iceland. The letter demanded that the international maritime industry strictly adhere to navigation safety standards and maritime law. A key provision was that vessels using multiple flags or unclear flags could be treated as 'stateless vessels' under Article 92 of the UN Convention on the Law of the Sea. Stateless vessels are subject to mandatory search, detention, and seizure.

This legal and military pressure unfolding at sea interlocked perfectly with Ukraine's physical strikes against the ports.

Ukrainian drones block the loading of crude oil at Russian ports. Tankers that barely escape the ports hit a second barrier: inspection and seizure by European navies. In the Baltic Sea, the French Navy stands watch. In the North Sea, Belgian forces. In the Mediterranean, French and Swedish forces. In the Caribbean, the United States. A net cast across the seas.

Starting in November 2025, Ukraine's Security Service (SBU) began directly striking the shadow fleet itself with drones. Off Turkey's Black Sea coast, the shadow fleet tankers Virat and Kairos came under drone attack. In December, the SBU conducted a long-range operation striking tankers carrying oil to India in the Mediterranean Sea.

According to analysis by the Atlantic Council, the Trump administration did not oppose Ukraine's strikes against the shadow fleet, and instead approved support as a means of pressure against the Russian government. This was reported by The Atlantic in December 2025, citing American and Ukrainian officials.

Russia also responded. On March 25, Nikolai Patrushev, a senior Russian official responsible for maritime policy, announced that armed security teams would be deployed on vessels flying the Russian flag. In this announcement, transmitted through Interfax, Patrushev explained the context by saying 'interference with Russian maritime trade is increasing.' Reports also emerged that Russian naval vessels were providing escort for tankers.

As a result, Russia's oil export chain became trapped in three layers of pressure.

First layer. Port bombardment. Ukrainian drones paralyzed the loading capacity of Primorsk, Ust-Luga, and Novorossiysk.

Second layer. Pipeline destruction. Both sides of the Druzhba pipeline (Ukrainian territory and Russian territory) were damaged, cutting off land-based exports.

Third layer. Maritime blockade. Naval seizure operations by European navies and the U.S. Coast Guard, along with direct strikes by Ukrainian drones on tankers, pressured maritime transport.

As these three layers of pressure operated simultaneously, Russia's oil export machinery fell into an unprecedented state of 40 percent paralysis.

What the West failed to achieve over three years starting in 2022 through paper sanctions, price caps, and insurance restrictions, Ukraine's drones and European navies' physical actions achieved in weeks. What the Center for Research on Energy and Clean Air (CREA) had long proposed,namely, 'a comprehensive maritime services ban targeting the physical infrastructure of exports',became reality through drones and warships rather than paper.

China and India, Russia's largest oil buyers, watched this situation unfold. According to CREA data, since the war began, China has purchased 48 percent of Russian crude exports and India 38 percent. With Baltic ports at a standstill, a significant portion of this volume cannot reach Asia. More distant and costly alternative routes become necessary, and even those must pass through the checkpoints of European navies.

The fires in the Baltic Sea did not die out. On Sunday, March 29, Ust-Luga came under drone attack once again. Governor Drozdenko announced that 36 drones had been shot down, but fires broke out at the port again. Bloomberg reported that 'Ukraine is intensifying its attacks on Russian oil export infrastructure.'

Primorsk resumed loading on March 27 at 'limited capacity.' It began loading crude onto the tanker Anlan, with Minerva Georgia standing by. But three industry sources cited by Reuters said 'It is unclear when normal operations will be possible due to infrastructure damage.'

As of the last week of March, here is how the situation stood. The blockade of the Strait of Hormuz cut off 20 percent of the world's oil supply. On top of this, 40 percent of Russia's oil export capacity came to a halt. With both crises operating simultaneously, the global oil market fell into the grip of a double supply squeeze. The smoke over the Baltic Sea and the mines in the Persian Gulf were shaking the same global crude market at the same time.

More than fifty tankers anchored in the Gulf of Finland waited at sea without loading crude oil. The dense cluster of these vessels' AIS signals on the MarineTraffic screen was a digital map showing the moment Russia's oil export machine ground to a halt.

AI expert, Attorney Kim Kyung-jin

AI legal policy specialist, former member of the National Assembly, author of numerous works

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