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U.S. put new sanctions on Russian bank for ties with Iran… Ukraine hesitant about energy truce with Russia… NATO fighter jet downs drone in Lithuania…
Editor’s note:
Our reporting team is entering a new, highly intense reporting era. We need to keep a close eye on the multi-layered political crises inside Ukraine, another round of peace deal attempts and rapid escalation in Russian attacks. At the same time, we are preparing for the approaching new difficult winter, which already makes our blood run cold as we remember how harsh the last
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OUR LEAD STORY:
KYIV, Ukraine – Trump is trying to blame Ukraine for his domestic political woes.
It’s hard to compare apples to apples here. But an analysis by The Counteroffensive shows that the Iran War’s disruption to world energy markets – and in particular diesel – is an order of magnitude larger than the impact of Ukraine’s long-range strikes.
Ahead of the U.S. midterm elections and rising prices at home, the unpopular president is trying to argue that the real bogeyman is Ukraine’s pesky strikes on Russian oil infrastructure. But our estimates show that his war in Iran has had a ~10x greater disruption in diesel supply.
Trump’s Iran War has been helpful to Russia in at least two ways: first, in that it created a dramatic rise in prices that allowed Russia to extract additional revenue to fund its war machine; second, it gave Trump a target to attack over America’s own economic woes.
“Open all the reports of analytical agencies and banking institutions, and there it will be said what is causing the current situation on the oil market,” Hennadiy Ryabtsev, energy expert, told The Counteroffensive. ”And that is the war in the Gulf. That is the blocking of the Strait of Hormuz. That is attacks on the respective tankers and pipelines that ensure the export of Middle Eastern crude.”
Trump’s scapegoating might have worked – except the facts aren’t remotely in his favor.
Let’s compare with the available data:
The best evidence shows that Ukraine’s long-range strikes reduced Russia’s diesel output by up to 1 million tons in April, and a further up to 600,000 tons in May — a cumulative shortfall of up to 1.6 million tons — per Reuters. Using the United Nations’ official energy conversion figure, this is a cumulative May loss of 373,000 barrels per day below the March baseline.
Meanwhile, energy economist Philip Verleger estimated in March to Reuters that the diesel supply loss from the Iran War is approximately 3-4 million barrels per day. Verlerger made this comment on diesel supply disruption due to the Iran War, during the height of the disruption.
Even if the numbers are not precise, the best figures we have show that the Iran War has had a significantly greater impact on world diesel supplies: between 8 and 10.7 times larger.
“As for whether [Ukraine’s strikes] influence the market, there is some influence, because before the Ukrainian attacks, Russia was an exporter of diesel. Now Russia is an importer of diesel,” said Serhii Fursa, deputy director at Kyiv-based investment firm Dragon Capital. “But is it a decisive factor of influence? No… diesel costs have risen since the beginning of the war in Iran. Therefore, this is an attempt to [make Ukraine] take responsibility before the elections and nothing else.”
On Sunday, Trump said he had made a peculiar request of Zelenskyy. He asked the Ukrainian president to halt strikes on the Russian oil refineries.
“Mr. Zelenskyy has to do one thing. He has to stop knocking out diesel fuel in Russia,” Trump stated. “Let him go after targets but not diesel fuel because he’s causing a shortage of diesel. This isn’t done by the Middle East; this is done by what’s happening with Russia and Ukraine.”
The following day, he posted on Truth Social that the war he started was not to blame. He further said that the two sides have agreed to a truce on striking energy targets, which was met with confusion on both sides.
“Russia will not agree to an energy truce. It is more profitable for Ukraine than for Russia, and that is why it still does not agree,” said Fursa.
This comes as oil prices in the United States have hit $103 per barrel and public opinion polling shows that 74 percent of voters think their cost of living is going in the wrong direction.
Interested in reading more stories about the energy sector? Check these out:
How Trump’s war gives Putin’s war machine a chance by Tania Novakivska and Oksana Stepura
Trump’s weeklong ceasefire? Russia says 2 days by Tania Novakivska and Anastasiia Kryvoruchenko
Why Ukraine’s heating is so vulnerable to Russian strikes by Mariana Lastovyria
Editor’s Note:
Our reporting team is entering a new, highly intense reporting era. We need to keep a close eye on the multi-layered political crises inside Ukraine, another round of peace deal attempts and rapid escalation in Russian attacks. At the same time, we are preparing for the approaching new difficult winter, which already makes our blood run cold as we remember how harsh the last one was.
Support our team to make this work possible.
THE LATEST NEWS AT THIS HOUR:
By: Oleksandra Khelemendyk
Good morning to readers; Kyiv remains in Ukrainian hands.
U.S. PUT NEW SANCTIONS ON RUSSIAN BANK FOR TIES WITH IRAN: On Monday, the U.S. tightened sanctions on Russia’s second-largest bank, VTB, Reuters reported. According to Treasury officials, it has offices in Iran, maintains ties with Iranian companies, and planned to move billions of dollars in Iranian frozen assets between Tehran and Moscow.
In February 2022, VTB Bank was cut off from the dollar system due to Russia’s invasion of Ukraine. The Treasury’s new executive order puts companies that continue working with VTB at high risk of secondary sanctions.
UKRAINE HESITANT ABOUT ENERGY TRUCE WITH RUSSIA: Politico quoted Donald Trump saying that Ukraine and Russia agreed to stop exchanging strikes on energy infrastructure on Monday.
Volodymyr Zelenskyy expressed doubt about a potential energy truce and Russia’s willingness to stop the war. He noted the pressure Ukrainian strikes put on Russia’s energy sector and weighed such an agreement only if the U.S. ensures that Russia follows through. In response, he offered further de-escalatory steps.
The discussion of the potential energy truce began after Donald Trump blamed a surge in diesel prices in the U.S. on Ukrainian attacks on Russia’s oil refineries.
NATO FIGHTER JET DOWNS DRONE IN LITHUANIA: According to Lithuanian media, NATO fighter jets were activated Tuesday night to shoot down a drone that breached Lithuanian airspace.
The drone, moving from the east, supposedly entered Lithuania from Belarus. About thirty minutes after threat detection, it was shot down by Italian aircraft in a rural area of the central Kaišiadorių district near Kaunas. President Gitanas Nausėda thanked the Allies for their timely reaction and noted that preparation for possible drone incursions is vital for regional security amid intensifying Russia’s aggression against Ukraine.
As part of safety measures, the activity of Vilnius airport was limited during the air raid alert, and some flights may be delayed or cancelled.
DOG OF WAR:
Terra (copper) and Lora (black) are showing local birds what they would do to a Russian invader.
Stay safe out there!
Best,
Tim, Mariana, and Oleksandra.
Any American who believes Trump’s lies about this is part of his cult or simply stupid. He’d rather blame Ukraine for the cost increases because he can’t imagine the probability of his own failures. It was solely his own idiotic impulsivity to strike Iran that caused this entire mess of a needless war and the consequent fuel price increases. It’s one of MANY remarkably moronic acts he’s committed this term. I just pray the world survives after all he’s done.
Zelensky's response should be obvious. It shouldn't be we will stop attacking Russian refineries when the Russians stop attacking our energy infrastructure, because Putin can never be trusted in any agreement. Zelensky should turn to Trump and say simply, we will stop attacking Russian refineries on the day that US Patriot missiles are delivered.