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Phil Flynn

Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665

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War Is Hitting Home. The Energy Report 10/20/2026

By On October 20, 2026 - 9:15 AM · In Market Commentaries, Phil Flynn Energy Report
The Russia-Ukraine war is hitting home — that is, Russian President Vladimir Putin’s home.  Ukraine attacks on a Russian refinery and oil facilities in Vladimir Putin’s old hometown of St. Petersburg help solidify the point that this war is about energy. The players in this war know that to win they have to destroy their enemy’s ability to produce oil or make money from energy. That is a major driving force to stay in power and control the region. It’s also a reminder that be rush to get a fossil fuels without viable alternatives it’s been a mistake that has fed into global instability.
Ukraine hit St. Petersburg with a large-scale drone attack over the weekend, setting fires at an oil terminal and depot in Putin’s hometown. Russian officials reported casualties and damage, while Kyiv said it was responding to ongoing Russian strikes on its own energy infrastructure. Earlier in the week Ukraine also hit the Ryazan refinery. The message is clear: energy infrastructure is a legitimate target when your own lights are going out.
At the same time, the Iranian president’s declaration that they would never surrender is raising fears that Iran could use a scorched-earth policy as its government comes under pressure. The oil embargo and U.S. naval blockade currently on Iran has successfully stopped Iranian oil exports. Reports say their main harbors and loading terminals at Kharg Island have sat empty for weeks, with no tankers docking since late August. Crude loadings have largely dried up, and floating stocks are running down. The Iranian economy has collapsed and the fear is that desperate Iranian leaders will continue to use desperate measures,
Market Screener report that Iran has deliberately prolonged talks with the US to try to weaken Donald Trump politically ahead of November’s US midterm elections, senior officials say, while fears of renewed military action and deep distrust of Washington have reinforced Tehran’s reluctance to strike a quick deal to end the war.
Three senior Iranian officials and an Iranian insider, speaking on condition of anonymity, said Tehran was convinced the US president was ready to resort to renewed attacks to try to break the stalemate in the eight-month-old war.
Add to that record-breaking tanker rates. Reuters reported today that Asian refiners are turning to smaller tankers, long-term charters, and buying Middle East crude on a delivered basis to cut costs as freight rates hover near all-time highs. Spot rates spiked in early October as Middle East producers ramped up exports using shuttle services and ship-to-ship transfers to move oil around the Strait of Hormuz. Shipping is eating into refining margins hard right now.
And while it seems all hopes are lost for peace, rumors are swirling that the U.S. and Iran are on the verge of a major peace or ceasefire agreement. Talk of a U.S.-China-Russia summit with no President Zelensky is also raising eyebrows. Trump has said he would do anything to end the war, “whether somebody is there or not.” Ukraine’s response so far is to keep hitting Russian energy infrastructure where it hurts — including in Vladimir Putin’s hometown.
In my little town of oil, I grew up believing that…….. energy is the ultimate currency of power. Right now the market is pricing that reality every day.
 The Wall Street Journal reported that “Risks to Middle East supplies also persist. Iran has been providing Yemen’s Houthi militia with intelligence and targeting assistance for attacks on Saudi Arabia, The Wall Street Journal reported. U.K. Maritime Trade Operations separately reported an attack on a tugboat near the United Arab Emirates Sunday, following attacks on two tankers off Saudi Arabia Friday. Meanwhile, the Saudi-led coalition said Tuesday that it intercepted and destroyed a ballistic missile launched by Yemen’s Iran-backed Houthi militia toward Riyadh.
And today it’s November WTI future expires we’re seeing a huge surge rising over $4 a barrel this morning as traders are buying up pushing supplies because the hurricane last week more than likely dried up supplies on the Gulf Coast. Now as far as what we are doing to trade this because of the flip flops is we’re relying heavily on the daily trade levels that we put out for every major market as well as option recommendations on the short dated options with the volatility are something that we need to focus on.
The War is also hitting home at the gas pump her as according to AAA, the national average for regular gasoline is $4.279 per gallon as of October 20, down slightly from recent levels but still about $1.24 higher than a year ago. Diesel is significantly elevated at $6.320 per gallon, near the September record high and more than $2.70 above year-ago levels. The Iran/Hormuz conflict and related global distillate tightness have clearly hit U.S. consumers and businesses, with diesel—the key fuel for trucking, farming, and industry—showing the sharpest impact. While gasoline has eased modestly on some tax relief and softer demand, the war’s effects remain firmly at the American pump.
Natural gas is down about 5 cents as classic shoulder-season weakness. Fox Weather’s forecast is showing a real lack of heating degree days and cooling degree days — nothing strong enough to move the needle on demand either way. Mild temperatures mean neither furnaces nor air conditioners are running hard.
Add to that the expectation that this week’s storage injection should be robust. Most estimates are clustering around an 82 Bcf build for the week ended October 16, which would sit near the lower end of the recent range but still keep inventories building at a solid pace. That kind of injection, combined with the weather forecast, is adding to the pressure on prices. In the shoulder season, weather is everything, and right now the weather is giving the market no reason to get excited.
So download the Fox Weather app and stay tuned to the Fox Business Network — invested in you. Call me today to get the daily trades and levels as well as the key option plays for every major sector. Just call 888-264-5665, follow me on X @EnergyPhilFlynn, and email pflynn@pricegroup.com.

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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