What are the primary geopolitical and energy risks shaping the 2026 market landscape?
Answer: Geopolitical developments in Russia and the Middle East are creating energy supply uncertainties.
Evidence: Russia’s fuel crisis, triggered by Ukrainian drone attacks on oil infrastructure, has left more than 25% of refining capacity offline, causing 18-hour gas queues in Irkutsk. Rosneft’s refinery damage raises the risk of a banking crisis and steep interest rate hikes. In the Strait of Hormuz, Iran’s ambassador to China signaled that Beijing could receive “special considerations” for fees on ships transiting the vital corridor through which approximately 20% of global energy supplies flowed pre-conflict. Iran may charge fees to fund safe passage and environmental repairs, though enforcement is tied to international maritime laws. Gulf states have rejected the fees, adding to geopolitical tension. Chevron (CVX) reported FY 2025 net margin of 6.7% and Exxon Mobil (XOM) reported FY 2025 net margin of 8.9%.
Key data points
- Russia’s refining capacity offline: >25%
- Gas queue time in Irkutsk: 18 hours
- Iran-China fee proposal: potential new cost on Strait of Hormuz traffic
- Chevron net margin: 6.7% (FY 2025)
- Exxon net margin: 8.9% (FY 2025)