The war in Ukraine is best understood as a "hurting stalemate," where neither side can achieve a decisive victory. Instead, each focuses on inflicting maximum pain and cost on the other—militarily, economically, and on civilian populations—hoping to break the adversary's political will to continue fighting.

Focusing solely on the Strait of Hormuz is a mistake. The global oil market is simultaneously strained by three other major disruptions: Houthi control over the Bab el-Mandeb strait, Ukrainian attacks on Russia's CPC terminal, and widespread outages in the global refining system, creating unprecedented systemic fragility.

A key tension exists within Ukraine's leadership regarding long-term strategy. One camp believes a longer war degrades Russia's economy and allows Ukraine's defense industry to integrate with Europe. The opposing view is that a prolonged conflict disproportionately damages Ukraine's own critical infrastructure first.

In intense conflicts, short-term ceasefires are frequently a strategic maneuver rather than a genuine move towards peace. While peace talks are publicly highlighted, both sides often use the downtime to rebuild their arsenals and rest their forces, making the truce a tool of war itself.

Re-establishing normal energy flows is not like flipping a switch. It can take months to recover even if a conflict ends quickly. Furthermore, if infrastructure like LNG plants or oil wells is damaged, the supply reduction and economic pain can last for years.

Recognizing Russia's high tolerance for military casualties, Ukraine has shifted its strategy to asymmetric economic warfare. By systematically using long-range drones to attack Russian oil refineries and tankers, Ukraine aims to inflict financial pain where the human cost of war has failed to be a deterrent, creating what they call "the real sanctions."

Ukraine is observing how Iran uses its control over a strategic chokepoint to gain global leverage. This could inspire Ukraine to shift from targeting domestic Russian infrastructure to attacking critical oil and petrochemical export hubs to force the world's attention.

A peaceful resolution in Ukraine would likely be bullish for oil. Russia would need to repair its refineries, increasing its domestic demand for crude oil. This internal consumption would reduce the amount of crude available for export, tightening the global market and pushing prices up.

Traditionally a defensive strength, Russia's immense size makes it nearly impossible to provide adequate air defense for its sprawling network of almost 40 major oil refineries. This geographic vulnerability allows Ukraine to inflict significant, widespread economic damage with low-cost, long-range drones that are difficult to counter.