Oil Market: Brent Surpasses $85 per Barrel
Oil prices are beginning the week with a confident upward trend. On Monday, the October Brent futures on the ICE exchange rose above $85 per barrel (+3.2% for the session), while American WTI traded around $79.5–79.8, and Russian Urals hovered around $79. The rise was driven by increased uncertainty surrounding the reopening of the Strait of Hormuz: the market, which just a week ago was factoring in a quick de-escalation and falling prices, is now forced to reintroduce a "geopolitical premium" into pricing.
The key factors influencing oil pricing at present are:
- Hormuz Factor: Through the strait, under normal conditions, about one-fifth of the world's oil supply and significant volumes of liquefied natural gas (LNG) pass. The partial blockade, which has been in place since late February, remains the main source of volatility.
- OPEC+ Supply: The alliance will complete the return of voluntary cuts in September, adding an additional 188,000 barrels per day to the market.
- Macroeconomics: Weak employment data from the U.S. has heightened expectations of a softening in the Federal Reserve's policy, which supports commodity assets but simultaneously signals risks for fuel demand.
Analysts note that in the event of a full agreement regarding the strait, Brent could quickly correct to the $70–75 range, whereas a breakdown in negotiations could push prices back to spring highs above $90.
Strait of Hormuz: Deal Close, but Tehran Raises Stakes
The diplomatic process concerning the world’s main oil artery has reached a critical stage. Iran and Oman have agreed on a unified corridor for vessel movement and, according to the Iranian Foreign Ministry, are in the final stages of creating a joint maritime governance mechanism. Washington, for its part, is prepared to lift the blockade on Iranian ports following an agreement, and the U.S. president previously cancelled military strikes to facilitate negotiations.
However, over the past weekend, Tehran sharply hardened its position, conditioning the reopening of the strait on a series of demands:
- the cancellation of sanctions on the Iranian economy;
- payment of compensation for damage incurred during the conflict;
- the U.S. refraining from intervention in regional negotiation formats.
For the global oil and gas market, the outcome of these negotiations is a central event in the coming weeks: from it depend freight rates, insurance premiums, supply routes for Middle Eastern oil and LNG to Asia and Europe, as well as the trajectory of energy prices through the end of the year.
OPEC+: Final Step in the Production Increase Cycle
Seven OPEC+ countries—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—have agreed to increase quotas in September by 188,000 barrels per day, mirroring the parameters of the previous three months. With this decision, the alliance effectively concludes the rollback of voluntary cuts amounting to 1.65 million barrels per day that have been in effect since 2023. After September, further increases in production are planned to be paused until the end of 2026; limitations from 2022 of approximately 2 million barrels per day remain in effect. The next ministerial meeting is scheduled for September 6. This indicates to the market that the OPEC+ supply factor for the coming months will be predictable, with the focus shifting to geopolitics and demand dynamics.
Gas Market: Europe Enters Heating Season with Record Low Reserves
The situation in the European gas market remains the most alarming in recent years. According to the Gas Infrastructure Europe association, the filling level of EU gas storage is about 58.8%—the lowest for early August in 15 years of observation and 16.5 percentage points below the five-year average. About 62–64 billion cubic meters of gas are in storage, almost 14 billion cubic meters less than a year earlier.
Reasons for the existing deficit include:
- Abnormal Heat: In July, Europe drew approximately 1 billion cubic meters of gas from storage for cooling and electricity generation needs—the highest summer withdrawal since 2022;
- Declining LNG Imports: August deliveries of liquefied gas are estimated at about 6.4 million tons—14% lower than last year's level, partly due to supply restrictions from the Middle East;
- High Prices: Prices at the TTF hub remain at multi-month highs (approximately $690 per thousand cubic meters), making injection economically painful.
The EU has already reduced its target level for storage filling ahead of the heating season from 90% to 80%; however, to achieve even this target, injection rates must significantly increase. Europe's gas balance in winter 2026–2027 will critically depend on weather conditions, competition with Asia for LNG, and the situation in the Strait of Hormuz, through which Qatari LNG transports occur.
Russian Oil Products Market: Export Ban as New Norm
Russia's domestic fuel market continues to operate under strict regulation. The government has extended the ban on gasoline exports until January 31, 2027—this restriction applies to both producers and traders. The ban on diesel fuel exports remains in place until August 31, 2026, although from September 1, diesel, marine fuel, and gas oils exported directly by producers will be exempt from restrictions.
Measures to stabilize the fuel market include:
- Priority saturation of the domestic market due to unplanned shutdowns of refineries following drone attacks and repairs;
- A temporary regime for guaranteed supplies of gasoline and diesel to agricultural producers during the harvesting campaign—agreements between the Ministry of Energy, Ministry of Agriculture, regional authorities, and oil companies are effective until November 1;
- Tax amendments and a damping mechanism to stimulate refining and retain fuel within the country;
- Permission to use straight-run gasoline blends for producing high-octane fuel.
For the global oil products market, the exit of Russian gasoline volumes and part of the diesel from export channels means a tighter balance and support for crack spreads, particularly in the Mediterranean, Africa, and Latin America.
Asia: India and China Strengthen the Role of Anchor Buyers
Asian consumers remain the main center of attraction for commodity flows. Russian oil exports to India increased in July, supported by price discounts and logistical restructuring amid the Middle Eastern crisis. China is increasing its purchases of pipeline gas and continues to balance between imports and domestic production, ramping up internal hydrocarbon production. The slowdown in inflation in China, as oil shocks ease, indicates the gradual adaptation of the world's second-largest economy to the new pricing realities. The competition between Asia and Europe for available LNG volumes will be a key intrigue of the upcoming winter.
Electricity Sector: AI and Data Centers Reshape Demand
A structural theme in global energy remains the explosive growth in energy consumption by data centers. Artificial intelligence is turning electricity into a strategic resource: energy companies in the U.S. and Asia are launching new gas plants and extending the lifespan of coal units to meet the base load of data centers. In Russia, plans are being developed to deploy data centers in energy surplus regions with gas, coal, and nuclear generation, as well as near Siberian hydropower plants. Investors are increasingly viewing the electricity sector as a “second derivative” of the AI boom—from grid companies to turbine and energy storage system manufacturers.
Renewable Energy and Energy Transition: Growth Continues, but Balance Becomes Complicated
Renewable energy is maintaining high rates of capacity additions: solar and wind generation are setting records in China, Europe, and the U.S., and in Central Asia, renewable energy output is increasing by over 20% year-on-year. However, energy systems are increasingly feeling the need for flexible capacity and storage; the hot summer of 2026 demonstrated that peak demand for cooling and the needs of data centers cannot yet be met without traditional generation. The investment focus is shifting from simply increasing “green” megawatts to energy storage systems, smart grids, and hybrid projects.
Coal: Eastern Vector and Support from Energy Deficit
The coal market is receiving support from two sides: sustained demand in Asia and a new factor—energy supply for data centers. The loading of Russian coal in the eastern direction has reached record levels—over 10 million tons per month—reflecting the reorientation of exports towards the Asia-Pacific markets. In India and Southeast Asia, coal generation remains the backbone of the energy balance, while high gas prices in Europe support the competitiveness of coal in the global electricity sector, despite environmental concerns.
Outlook: Key Points for Market Participants on August 11
Key indicators for investors and energy sector companies on this day include:
- Negotiations on the Strait of Hormuz—any statements from Tehran, Muscat, and Washington will be instantly reflected in Brent, WTI, and freight rates;
- The dynamics of gas injections into European storage and prices at the TTF hub—an indicator of the region's winter preparedness;
- Statistics on U.S. oil reserves and signals from the Federal Reserve about interest rate trajectories;
- The situation in the Russian fuel market—exchange prices for gasoline and diesel amid the export ban;
- Corporate news from energy companies related to projects under AI infrastructure.
The baseline scenario for the upcoming sessions sees Brent maintaining within the $80–87 per barrel range with increased volatility: the oil, gas, and electricity markets continue to operate in rhythm with the diplomacy surrounding the Persian Gulf and the Northern Hemisphere's preparations for an atypical winter.
