Oil Market: Military Premium vs. Signs of Buyer Fatigue
Oil prices moved in different directions on Thursday: after three sessions of steady growth that lifted Brent to five-week highs above $96, the market corrected to $95 in the morning, but by midday buyers regained control—with November Brent futures rising to $97 and WTI to $92.5 per barrel. On Friday, the market opens with a continued sensitivity to news headlines. Key price drivers include:
- Escalation of Conflict: The US struck roughly 100 Iranian targets, including radar systems, maritime facilities, and communication sites; Tehran retaliated by targeting US assets in the region and attacking commercial vessels.
- Restricted Transit through Hormuz: The movement of tankers through the Strait, which previously accounted for up to 20% of global maritime oil trade, has sharply decreased, and freight and insurance costs in the Persian Gulf remain extremely high.
- Betting on Alternative Routes: Market participants are hoping that alternative pipeline and maritime supply routes will partially offset the lost volumes—this is what keeps prices from surging to $100.
- Risk of Sharp Correction: The higher the military premium rises, the more painful the pullback may be if signals of de-escalation or negotiations emerge.
Analysts see the basic trading range for the coming sessions as $92–98 per barrel for Brent: support at $90 appears solid for now, while the psychological resistance level is $100.
Geopolitics: The Strait of Hormuz Remains the Epicenter of Energy Risk
The US-Iran conflict has now lasted seven months, and the current phase is one of the most dangerous for the global energy market. Washington claims control over the waters, while Tehran threatens to close the strait to commercial shipping. It is fundamentally important for the global FES that not only Saudi, Iraqi, and Kuwaiti oil passes through Hormuz, but also Qatari LNG: limiting nearly one-fifth of global liquefied gas supply has already triggered a price shock in Europe and Asia.
Market Scenarios
- A strike on Iranian export infrastructure, including Kharg Island, would add several dollars to the risk premium for oil.
- A freeze of the conflict with limited transit would keep prices in the upper range amidst high volatility.
- A diplomatic breakthrough and restoration of shipping would lead to a rapid drop in the premium and a correction of Brent to $85–90.
OPEC+: Meeting on September 6 as the Main Focus of the Week
As of September, seven key OPEC+ countries—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—have increased their quotas by 188,000 barrels per day, fully ending the voluntary cuts of 1.65 million bpd. The total allowed production level has reached 36.2 million barrels per day, and further increases are on hold until the end of 2026, with baseline restrictions of approximately 2 million bpd, which have been in effect since 2022, remaining in place. Ministers are set to gather again on Sunday, September 6: the market will be looking for signs of whether the alliance is prepared to employ spare capacity to compensate for the lost Middle Eastern volumes. An additional intrigue lies in the redistribution of quotas following the UAE's exit from OPEC and OPEC+ in May 2026.
Gas Market: Europe Enters Winter with Record Low Stocks
The European gas market is experiencing its most strained start to autumn since the 2022–2023 crisis. October futures at the TTF hub are trading in the $880–895 per thousand cubic meters range, gaining about 20% since July and surpassing the $800 mark for the first time in five months by the end of August. Traders are seriously discussing testing the $1000 level. The fundamentals of this rally include:
- EU underground storage is filled at only about 58%—historically low levels ahead of the heating season;
- Significant volumes of Qatari LNG have been lost due to shipping restrictions through the Strait of Hormuz;
- Increased summer gas consumption by power plants due to heat and rising energy demand;
- Suppliers are warning of risks to the stability of energy supply in the region this winter.
LNG: US Exports as a Balancing Factor
Partially alleviating the situation are new liquefaction capacities in the US operating near record utilization levels, alongside reduced demand in Asia: China cut LNG imports by approximately 18% in August, and price-sensitive buyers such as Pakistan are forgoing expensive spot cargoes. However, there are not enough available volumes to fully offset the losses from the Middle East, which keeps gas prices in Europe and Asia highly volatile.
Electricity and Renewables: Data Centres Reshaping Demand
The global electricity sector is adapting to expensive gas through renewable sources: where the share of renewables is higher, dependency on imported fuels is less pronounced. A structural trend of the year is the explosive growth of energy consumption by data centres and artificial intelligence infrastructure: global data centre consumption is already comparable to the energy balance of a large European country, and access to grid power is becoming a scarce asset. China is launching megaprojects for direct supply of solar and wind generation to data centre clusters, while in the US, tech giants are contracting "green" electricity through long-term PPAs, and investments in grids and storage systems are becoming one of the main areas of capital expenditure in the sector.
Coal: A Safety Resource Amid the Gas Shock
The coal market is once again benefiting from the gas crisis. The switch of power plants from expensive gas to coal is being observed in both Asia and certain European countries, supporting the prices of thermal coal and the utilization of key exporters—Indonesia, Australia, Russia, and South Africa. China and India continue to maintain high volumes of coal generation to cover peak loads: in the short term, coal remains an irreplaceable safety net for global energy, despite long-term decarbonization goals.
Russian Oil Products Market: Record AI-92 and Strict Regulation
The domestic fuel market in Russia remains under pressure. Exchange prices for AI-92 gasoline have reached a historical high, exceeding 75,000 rubles per ton; local supply disruptions persist in certain regions, although the situation is gradually stabilizing in the capital agglomeration. The government is responding with a set of measures:
- A complete ban on gasoline exports is in place until January 31, 2027, applying to both producers and traders;
- The ban on exports of diesel and marine fuel has been extended to September 30 for producers and until the end of January 2027 for other exporters;
- Since September 1, the sale of K2–K4 class gasoline has been permitted to increase fuel availability in the regions;
- The deficit is being covered by imports from Belarus, Kazakhstan, India, and Turkey, as well as the accelerated recovery of refineries and reduced durations for planned repairs;
- The Federal Antimonopoly Service has intensified control over pricing at independent petrol stations, while the damping mechanism continues to compensate oil companies for some of their lost revenues.
Key Guidelines for Investors on Friday, September 4
- Dynamics of the US-Iran Conflict: Any signals regarding a strike on export infrastructure or, conversely, negotiations could shift Brent by a few dollars in either direction.
- Preparations for the September 6 OPEC+ meeting: Leaks about the positions of Saudi Arabia and Russia are likely to set the direction for oil prices even before the meeting.
- Filling Rates of European UGS: These will determine whether TTF gas will settle above $900 per thousand cubic meters.
- Transit through the Strait of Hormuz: The restoration of shipping would be the main deflationary factor for oil and LNG.
- The Russian Fuel Market: Exchange prices for gasoline and the effects of targeted easing for diesel exports.
The baseline scenario for the end of the week is the maintenance of elevated prices for oil and gas amidst high volatility: the energy market continues to trade geopolitical tensions rather than supply and demand balance, and investors should prepare for sharp intraday price movements ahead of the OPEC+ meeting on September 6.
