GREED & fear: Traps and the escalation dynamic

Research evidence excerpt

GREED & fear: Traps and the escalation dynamic

Meanwhile, in terms of the impact on prices, there remains a big difference between the price of crude oil

quoted in world financial markets and what people are actually paying in real life. Inflation is also kicking in

through higher freight, industrial fuel and transportation costs, which are not immediately reflected in the

global price of a barrel of oil. Then there is also the growing impact on fuel and food and other prices as a

result of the escalation in the Ukraine-Russia conflict. GREED & fear refers in part to the continuing Ukrainian

drone attacks on Russian refineries. For example, Ukranine struck two major Russian oil refineries on Tuesday,

including the Salavat petrochemical complex, one of Russia’s largest oil refining and petrochemical facilities

(see The Kyiv Independent article: “Ukraine hits 2 Russian oil refineries, 11 vessels in strike spanning hundreds

of miles”, 14 July 2026). Indeed Ukrainian forces have carried out about 50 attacks on Russia’s fuel-producing

facilities over the past 100 days, hitting at least 24 out of 34 large refineries, according to a Bloomberg tally

(see Bloomberg article: “Russian Refinery Runs Plunge to Lowest in More Than Two Decades”, 13 July 2026).

As a result, crude-processing rates in Russia have averaged 3.9m barrels a day so far in July, the lowest level

since March 2005, or more than 1.4m barrels/day below the year-ago average.

One interesting consequence of this is that Russia has begun buying gasoline from India to address the

domestic shortage. Reuters reported earlier this month that at least 60,000 metric tons of gasoline have been

dispatched from India to Russia (see Reuters article: “Russia buys gasoline from India to tackle shortages,