None of these developments should be treated as a single coordinated event. They arise from different conflicts and policies. But their consequences increasingly overlap. And that overlap matters. Oil is not simply a commodity in this environment. It is revenue for governments, fuel for wars, leverage over adversaries, a strategic vulnerability for importers and, increasingly, part of a wider debate over the financial system through which international trade is conducted. The result is a question larger than Russia, Ukraine, the United States, India or the Middle East individually: What happens when the physical energy system and the geopolitical system begin fragmenting at the same time?
The World’s Oil Map Is Being Redrawn by War
The most immediate sign of the changing environment is the growing vulnerability of the infrastructure that moves and processes oil. On September 19–20, Ukraine launched what the Institute for the Study of War described as its largest combined missile-and-drone strike against strategic targets in Moscow Oblast. Russian authorities said more than 1,600 drones had been intercepted, including about 450 headed towards Moscow. A facility at the Moscow oil refinery was damaged and three people were reported killed in the wider Moscow region.
The significance goes beyond the size of the attack. Ukraine has increasingly targeted Russia's energy infrastructure because refineries, fuel supplies and oil revenues are directly connected to Moscow's ability to sustain the war. The International Energy Agency reported on September 17 that Russian refinery throughput had fallen to 3.8 million barrels per day in June, its lowest level in more than two decades and that repeated Ukrainian attacks had contributed to fuel shortages and restrictions on Russian exports.
Thousands of kilometres away, another oil-producing power is facing a very different war. Saudi Arabia has been confronting an increasingly direct Houthi campaign. On September 19, Saudi authorities said they intercepted a ballistic missile fired towards Riyadh. The Houthis also claimed attacks on sites including Yanbu, a Red Sea port with important oil infrastructure; those claims should be treated as Houthi statements rather than independently established facts. The geographical consequences are significant.
Hormuz remains severely disrupted. Reuters reported on September 21 that only 17 commodity vessels had crossed the Strait over the preceding weekend, compared with 37 the previous week and roughly 125 vessels a day before the conflict. At the same time, Saudi Arabia has been forced to adjust its export routes after attacks affecting its East-West pipeline, while traffic through Bab el-Mandeb has also fallen. The world's oil is still there. But getting it from producer to consumer safely, cheaply and predictably is becoming harder. That distinction may prove more important than the headline production figures.
Russia, Ukraine and the Oil Battlefield
The Russia–Ukraine war has increasingly developed an energy front of its own. Ukraine's strategy is understandable from a military perspective: if Russian refineries are damaged, fuel becomes scarcer; if export infrastructure is disrupted, oil revenues can fall; and if energy facilities require repeated repairs, Russia has to divert resources towards protecting and restoring them.
The IEA's assessment shows just how extensive this campaign has become. During the first eight months of 2026, a Russian refinery was hit approximately once every three days. By late August, only five major Russian refineries remained untouched by Ukrainian drone attacks. The agency also reported that Russia had introduced restrictions on gasoline, diesel and jet-fuel exports as domestic supplies came under pressure.
The September attack on Moscow takes that campaign to another level. Striking energy infrastructure near the Russian capital is not the same as striking a refinery hundreds of kilometres from Moscow. It carries a different political message and creates a different escalation risk. Russia has already demonstrated that it can respond to attacks on its territory with further strikes on Ukraine. The danger is that a cycle of attacks on increasingly sensitive targets can narrow the space for diplomacy. There is also an uncomfortable economic paradox.
The West wants Russian oil revenues to fall. Ukraine wants to damage the energy infrastructure that supports Russia's war effort. But if Russian supply falls while global supply is already constrained, the remaining barrels can become more valuable. S&P Global reported in September that discounts on Russian crude had narrowed as Middle East supply concerns intensified and Ukrainian attacks reduced Russian output. Buyers were increasingly bidding for available crude despite sanctions-related risks.
The IEA has identified the same contradiction from another angle: Middle East supply disruptions have supported global oil prices, which in turn have helped Russian oil and gas revenues even as Ukrainian attacks damage Russia's refining sector. This is the first major paradox of the new oil war: A policy designed to reduce Russia's energy income can become less effective if a wider geopolitical crisis simultaneously raises the value of every available barrel.
The global oil market is entering an unusual and potentially dangerous phase. Russia's energy infrastructure is being targeted deep inside its territory; Saudi Arabia is facing an expanding Houthi campaign; the Strait of Hormuz remains severely disrupted; the Red Sea and Bab el-Mandeb are under pressure; Washington has strengthened its ability to penalise major buyers of Russian energy; and Venezuela is being drawn into a new US-led energy strategy.
As Russia faces pressure, the Middle East descends into turmoil and Washington reshapes energy policy, wars, sanctions and new financial arrangements are beginning to collide.
By Geopolitical Analysis
Desk, The Centre
21 September 2026 • 06:15 PM IST • 7 min read
The Middle East: When the World’s Oil Heartland Becomes a Battlefield
If Russia represents the energy front of the European war, the Middle East represents something even larger: the concentration of several critical producers and maritime chokepoints in one increasingly unstable theatre. The Strait of Hormuz sits at the centre of it. The waterway connects the Persian Gulf with the Gulf of Oman and the wider Indian Ocean. Its importance is not simply that enormous quantities of oil normally pass through it. It is that there are limited alternatives capable of replacing the same scale of Gulf exports quickly.
The IEA's September Oil Market Report illustrates the scale of the disruption. Global oil production fell by 1.6 million barrels per day in August, while more than 10 million barrels per day of Gulf production remained shut in because of security risks. Global inventories had fallen by 507 million barrels since the beginning of the conflict. Saudi Arabia has attempted to compensate through alternative routes, but those alternatives are themselves vulnerable.
The kingdom's East-West pipeline was designed precisely to provide a route to the Red Sea that reduces dependence on Hormuz. Yet attacks have disrupted that infrastructure. Reuters reported that Saudi Arabia subsequently increased exports through Hormuz, illustrating the uncomfortable reality: when one route becomes vulnerable, the kingdom may have to rely more heavily on another route that is itself under geopolitical pressure. Then there is Bab el-Mandeb.
The narrow passage between Yemen and the Horn of Africa connects the Red Sea with the Gulf of Aden and the Indian Ocean. Houthi attacks have already transformed the security calculation for commercial shipping. The result is a chain :
Iran and Hormuz → Gulf oil → Saudi Arabia → Red Sea → Bab el-Mandeb → global shipping.
And the consequences extend well beyond the Middle East. Higher insurance costs, longer shipping routes, disrupted refinery supplies and rising freight rates can affect consumers thousands of kilometres away from the battlefield. Yet there is another important nuance. Oil markets are not moving in only one direction. Reuters reported on September 21 that Brent had fallen to around $102 a barrel as investors began pricing in possible diplomatic progress in the Iran conflict and some recovery in Saudi shipments. That is why the story should not be reduced to “the world is running out of oil.” The problem is geopolitical reliability. The world can have enough crude in the ground while simultaneously struggling to move enough of it through safe and economically viable routes.
The West Wants Russian Oil Money to Stop, but the Timing Is Dangerous
The Western objective is not difficult to understand. Russia's energy exports provide Moscow with revenue. That revenue supports the Russian state and, indirectly, its ability to sustain the war in Ukraine. The United States and European governments therefore want to reduce the economic benefits Russia receives from selling hydrocarbons. The European Commission's own explanation of its Russian energy sanctions says the measures are intended to reduce Russian revenues while also trying to protect global energy-market stability. Washington has now strengthened the pressure.
On September 18, President Donald Trump signed the new Russia sanctions legislation. Reuters reported that the law gives the president authority to impose tariffs of up to 100% on the five largest buyers of Russian oil and gas, as well as on countries facilitating sanctions evasion. The legislation gives the administration considerable discretion over how and against whom that authority is used. The intention is clear: make the Russian energy business more difficult and increase the cost for major purchasers. But this is where the timing becomes problematic. The Middle East is already in turmoil.
Saudi infrastructure is being attacked. Hormuz is severely disrupted. Red Sea shipping is under pressure. Russia's refining system is being hit by Ukrainian strikes. And global inventories have been falling rapidly. Under these circumstances, forcing major buyers to reduce Russian purchases is not simply a geopolitical decision. It is also an energy-market decision. China and India are particularly important because they are among the largest buyers of Russian crude. Beijing has already objected to the new US sanctions legislation, saying it opposes unilateral sanctions and secondary sanctions against countries trading with third parties.
For India, this creates a particularly difficult strategic calculation. New Delhi has repeatedly argued that its energy purchases must reflect national economic interests and energy security. The Indian foreign ministry has also warned Washington that measures against Russian oil could affect bilateral relations and the international energy market. But this is not only an India problem. It is a problem for every major energy importer confronted with the same question: If one major source of affordable crude becomes politically dangerous, where does the replacement come from? And that brings us to Venezuela.
Washington is simultaneously trying to expand the role of Venezuelan oil within a US-linked energy system. The White House says its August agreement gives US interests substantial control and guaranteed access associated with more than 65 billion barrels of Venezuelan proven reserves. Those are the administration's claims about the arrangement; independent reporting has cautioned that bringing Venezuela's oil production back up will require substantial investment, infrastructure and time. That distinction matters. Venezuela cannot simply replace Russian barrels or Gulf production overnight. But strategically, its significance is obvious: it gives the Western Hemisphere another enormous resource base at a time when the Middle East is becoming less predictable. The United States itself makes this story even more complicated.
Washington is not merely a consumer dependent on foreign oil. It is one of the world's largest oil producers. The IEA expects the Americas to provide the bulk of growth in non-OPEC+ production in 2026 and 2027. So the emerging energy landscape is not simply: West versus Russia. It is a much more complicated contest involving production, refining, sanctions, shipping, investment, financial access and strategic control over future supply. And this is where legitimate questions about Western decision-making arise.
The objective of reducing Russian war revenues may be understandable. But does the timing make strategic sense when the global energy system is simultaneously exposed to several major shocks? A policy can have a rational objective and still produce difficult secondary consequences. That is the question worth asking, not whether the West is uniquely responsible for today's energy crisis.
From Oil to Money: BRICS and the Search for Alternatives
The energy story does not end with barrels. It increasingly leads to the financial system through which those barrels are bought, sold, insured, financed and settled. This is where the 18th BRICS Summit in New Delhi becomes relevant. India's BRICS presidency did not produce a common BRICS currency. Nor did the New Delhi Declaration announce the replacement of the US dollar. But something more incremental happened.
The New Delhi Declaration explicitly welcomed work on cross-border payment mechanisms, interoperability of payment and messaging systems, and discussions on promoting trade settlements and investment using BRICS local currencies. It also encouraged continued technical work on settlement and depositary infrastructure. The distinction is important. There is no BRICS currency. But countries do not necessarily need a new common currency to reduce their dependence on a single currency for every transaction.
They can begin by increasing the share of bilateral trade settled in their own currencies, connecting payment systems and developing financial infrastructure that allows trade to take place with fewer intermediary layers. That is a much slower process and a much more realistic one. It is also relevant to energy. Imagine a world in which a major oil producer is under Western sanctions, a major buyer wants to continue purchasing its crude, and both sides have an incentive to reduce exposure to the financial infrastructure controlled by the sanctioning side. The question becomes not merely: Where is the oil?
It becomes: How is the oil paid for? Which currency is used? Which banks clear the transaction? How is the trade financed? How is it insured? And what happens if one financial system refuses to process it? This is why the BRICS discussion matters even though no common currency was announced. It represents one part of a broader search for optionality. And India has a particular interest in that process, not because it is seeking the collapse of the dollar system, but because strategic autonomy is easier when a country has more than one financial and commercial route available to it.
That is also why the development should not be exaggerated. The dollar remains deeply embedded in global trade, finance, reserves and commodity markets. BRICS members themselves have different economic structures, currencies, interests and levels of financial integration. The emerging system is therefore unlikely to replace the existing one overnight. It may instead become more plural.
A More Fragmented World of Energy and Money
The most important development may therefore not be any single missile, sanction or oil shipment. It is the way several systems are beginning to intersect. Russia is trying to preserve energy revenues while Ukraine attacks the infrastructure that generates them. Ukraine is taking the war deeper into Russia, including attacks around Moscow, raising both military and escalation risks.
Saudi Arabia is trying to protect its energy infrastructure while fighting an increasingly direct Houthi campaign. Iran and the Houthis are affecting the security of two of the world's most important maritime routes. The United States and Europe are trying to reduce the revenue Russia derives from oil while simultaneously dealing with the consequences of a disrupted global energy market. Venezuela is being drawn into a new Western Hemisphere energy strategy. China and India are navigating a world in which energy security increasingly intersects with geopolitical alignment. And BRICS is exploring payment interoperability and local-currency settlement, not creating a common currency, but gradually expanding the number of ways in which international trade can be conducted.
These developments are not all part of one grand plan. Treating them as such would be too simplistic. But neither are they completely unrelated. They are connected by something fundamental: energy is power, and the systems through which energy is traded are becoming increasingly geopolitical. The danger for the world is that the attempt to weaponise energy can produce consequences that nobody fully controls. The West may want to reduce Russia's oil revenues.
Ukraine may want to weaken Russia's energy infrastructure. Saudi Arabia may want to defeat the Houthis. Iran may want to retain leverage over its regional adversaries. The United States may want a more secure Western Hemisphere energy base. BRICS countries may want greater financial and commercial optionality. All of those objectives can coexist.
But when they collide inside an already stressed oil market, the result can be a world where the problem is no longer simply who has oil, but who can move it, who can buy it, who can pay for it and who can prevent somebody else from doing so. That is what makes the emerging global oil order so consequential. And perhaps the most important question is no longer whether the old energy system will survive. It is , what kind of system will replace it if the world becomes permanently more fragmented.
