By Ariel Cohen
An energy war is being waged on two fronts. One front is in the Strait of Hormuz, where Iran and the United States are at an impasse. The executive director of the International Energy Agency, Fatih Birol, described this phenomenon as the worst energy crisis in history, more serious than the oil crisis of the 1970s and the war in Ukraine combined. The second front is in Europe, where Ukrainian drones are systematically "dismantling" Russia's oil export infrastructure, while Moscow, hurt and angry, is punishing its neighbouring country and ally, Kazakhstan, as well as Germany for this.
No solution is in sight and the possibility of escalation is high.
The diplomacy that collapsed and what follows
The mediation under the auspices of Pakistan, which led to the April 8 ceasefire, was dealt a devastating blow due to a translation error. Islamabad reportedly forwarded different versions of Iran's 10-point proposal, while the English translation sent to the White House omitted Iran's non-negotiable request for "acceptance of uranium enrichment." When the situation cleared up, White House press secretary Caroline Levitt confirmed that Trump threw the proposal "in the trash." The talks broke down after 21 hours.
The structure of an Iran-US agreement exists. The political will to sign it does not exist. Amid the power struggle in Tehran, it may never materialize.
Russia uses a pipeline as a weapon
With the world focused on Hormuz, a second energy crisis began with a simple announcement from Moscow. The Kremlin is putting pressure on oil prices, profiting from revenues and putting the West in the grip of escalating oil prices and the threat of inflation.
Russia has confirmed that it will cut off oil deliveries from Kazakhstan to Germany through the northern branch of the "Druzhba" pipeline, effective May 1. Deputy Prime Minister Alexander Novak invoked "technical limitations", adding meaningfully: "The Germans have abandoned Russian oil, so they are doing just fine." This concerns the Schwedt refinery in Brandenburg, one of the largest in Germany, which supplies much of the Berlin area with diesel, gasoline, kerosene and heating oil. Kazakhstan's crude oil accounts for 20-25% of the refinery's raw material. Kazakhstan's energy minister has hinted that the outage is due to Ukrainian drone attacks on the infrastructure of "Druzhba", a technically convenient explanation for something that is a political act.
The broader context matters. Ukraine has spent the last month systematically targeting Russia's oil export infrastructure with long-range drones. The Tuapse refinery in the Black Sea, which processes 12 million metric tons of crude a year, was hit twice in one week, killing one person, while the fires that broke out required the intervention of at least 150 emergency personnel to extinguish them. Social media spoke of a column of smoke that stretched for 300 km. and a rain mixture of soot and oil falling from the sky.
The Baltic ports of Ust-Luga and Primorsk, Russia's two largest oil export terminals, were so badly damaged at the end of March that Finnish shipping authorities reported that the number of ships being loaded fell significantly from 40-50 on average per week. When a tanker tried to dock in Ust-Luga on April 5, Ukraine struck the port again, setting fire to three 20.000 cubic meter storage tanks. About 40% of Russia's oil export capacity, about 2 million barrels per day, was shut down.
Putin, seeing Ukraine dismantle its oil infrastructure with European-funded drones, is now threatening to take the war to the Baltic states as drones cross their airspace, and punish Germany by cutting off the only alternative supply of crude oil that still flows through Russian territory. Russia had already halted pipeline exports to Hungary and Slovakia in January due to damage to the Druzhba pipeline. The message from Moscow was clear: if Europe finances Ukraine's attacks on Russian energy, Europe will pay the price.
The former finance minister of Brandenburg described the situation as "serious, even dramatic", noting that the 2,6 million. tons of crude from Kazakhstan are "a lifesaver for the refinery and are difficult to replenish." In 2025, Kazakhstan exported about 43,000 barrels per day through the Druzhba pipeline to Germany, 44% more than in 2024.
Germany in the crosshairs
On an ordinary day, the loss of 43,000 barrels of Kazakh crude per day would be a manageable industrial problem. But April 22, 2026 was not an ordinary day.
German aviation is already in crisis. Lufthansa has announced that it is cancelling 20.000 flights by October, saving 40.000 metric tons of jet fuel, as prices have doubled since the start of the conflict on February 28. The airline has permanently grounded CityLine's entire regional fleet, consisting of 27 aircraft. European jet fuel is now trading at $188 per barrel, up 106% year-on-year. Lufthansa started the year with 80% of its fuel for 2026 offset at pre-collision prices in the Middle East. SAS started 2026 without any compensation and cancelled around 1,000 flights in April. These disturbances are directly due to the closure of Hormuz and disturbances in the Gulf refineries.
Flight cancellations don't just cause inconvenience to travellers; They disrupt the logistics networks, the transport of goods, mail, spare parts and perishable products that form the basis of European supply chains. Food and fertilizer distribution, already squeezed by the increased cost of diesel, is facing further pressures as summer approaches. The suspension of the "Druzhba" pipeline adds pressure on diesel and heating oil, in addition to that exerted on jet fuel. Iranian attacks on Qatar's LNG terminal have cut up to 2 million tonnes. tons of LNG per year. This amount is equivalent to 2.7–2.8 billion cubic meters of natural gas per year. Germany, which shut down its nuclear reactors, is now under pressure from all sides.
The trap of the Central Bank
Two simultaneous supply disruptions, in Hormuz and in the "Druzhba" pipeline, constitute the scenario that monetary policy is least prepared to deal with. Raising interest rates does not produce more oil. Lowering interest rates does not repair pipelines. As the IMF warned last week, the lesson of 1973 is that "you must not let an energy crisis turn into a permanent inflation problem." The former governor of the Bank of Israel, Jacob Frenkel, in an article co-authored with Rajan and Weber, argued that central banks have only one tool, and this is not the right one for this problem.
The numbers reflect the impasse. The ECB's strict scenario puts eurozone inflation in 2026 at 4.4% against GDP growth of just 0.9%. UK government bonds appreciated at a rate not seen since the 2008 financial crisis, within a month. Meanwhile, the Federal Reserve has effectively abandoned its easing cycle for 2026; The market does not value the "boom". It assesses paralysis.
On April 17, Iranian Foreign Minister Abbas Aragji said the Strait of Hormuz was open, crude oil was down 11 percent, the S&P 500 was up 7,100 and the Nasdaq was on its longest rise since 1992. April 18 marked the restart. Today, with the truce in uncertainty, ships being seized, Russia cutting crude oil supplies to Germany and Lufthansa cancelling a fifth of its summer flights, we remain in a state of concern. The price of gold above $4,831 indicates the hedge that investors are trying to find.
Forbes
