Oil and Gas News and Energy - Saturday, August 29, 2026

Oil Market: Brent at $88 — The Week Ends with a Drop of Over 5%

Oil prices are correcting after a two-week rally. Brent was trading near $88 per barrel on Friday, while WTI was around $82–83. The weekly decline for Brent exceeded 5%, with WTI down more than 4%. However, since the beginning of the year, the North Sea benchmark is still approximately 30% higher year-on-year: the premium for geopolitical risk following the closure of the Strait of Hormuz in February persists. Key price drivers for oil going into the weekend include:

• Diplomacy in Hormuz: The agreement between Iran and Oman on the division of control and revenue from transit through the strait remains the main bearish factor of the week, although Tehran emphasizes that there will be no immediate reopening of navigation.
• Firm U.S. Stance: Prices briefly reversed upward on Friday following reports that the U.S. is ruling out a return to the terms of the June peace memorandum with Iran—the market interpreted this as a sign that a final deal will be delayed.
• Russian Risk: Statements by Vladimir Putin regarding the fruitlessness of negotiations with Ukraine and preparations for the intensification of hostilities, coupled with ongoing strikes on Russian refineries and ports, limit Russia's export potential and provide underlying support for prices.
• Logistics in the Persian Gulf: Saudi Arabia is ramping up shipments from terminals within the Gulf, restructuring export routes due to threats from the Houthis to navigation in the Red Sea.

Venezuela and OPEC: A Founding Member on the Brink of Historic Exit

The key corporate-political news at the end of the week is reports that Caracas is seriously exploring an exit from OPEC. The issue is being discussed in talks with U.S. officials, with a final decision yet to be made. The context makes this narrative strategic for the entire global oil market:

1. Venezuela is one of the five countries that founded OPEC in 1960 and holds the world's largest proven oil reserves, with current production only around 1-1.2 million barrels per day.
2. The U.S. is discussing long-term agreements to allow American companies access to Venezuelan oil fields; some officials view the Washington-Caracas alliance as a counterbalance to OPEC's influence.
3. This is the second potential exit this year: the UAE left OPEC and OPEC+ as of May 1, 2026, and Iraq publicly expressed dissatisfaction with quota allocations over the summer.
4. Increasing Venezuelan production through American investments would add a new supply source to the market over a period of several years—a factor that could apply downward pressure on long-term prices.

For investors, the "Vexit" scenario primarily raises questions about the cartel's manageability: further fragmentation of OPEC+ increases the risk of a market share struggle reminiscent of 2020. An interim benchmark is the alliance's meeting on September 6, where the baseline scenario remains a pause in quota increases until the end of the year.

The Strait of Hormuz: Six Months of Crisis and a Fragile Diplomatic Window

Friday, August 28, marked a symbolic date—exactly six months since the onset of the military operation by the U.S. and Israel against Iran and the subsequent closure of the Strait of Hormuz, through which approximately 20% of global oil trade and nearly one-fifth of LNG flows occurred before the war. The current status of this key artery in the global energy market is:

• Iran and Oman have agreed on the coordinates of shipping routes: incoming traffic will use the northern corridor in Iranian waters, outgoing traffic will use the southern corridor in Omani waters, alongside a division of transit revenues and joint demining of the area.
• Tehran insists that the agreement with Muscat does not mean automatic reopening of the strait until the U.S. fulfills its obligations; traffic remains drastically below pre-war levels of approximately 130 vessels per day.
• Maritime security has not been restored: an attack on a tanker off the coast of Oman on August 25 keeps insurance rates at prohibitive levels.
• U.S. Treasury Secretary Scott Bessent is preparing to demand reductions in G20 partners' ties with Iran under the threat of limiting access to the dollar system—sanction pressure is shifting into the financial sphere.

Gas and LNG: Europe Enters Autumn with Minimum Stocks Since 2009

The gas market remains the most vulnerable segment of the global energy sector. TTF futures rose above €68/MWh at the beginning of the week—the highest since early 2023—but retreated to around €65–67 by Friday on news of diplomatic progress. The fundamental picture is concerning:

• Storage Levels: EU gas storage facilities are filled to only ~63%—the lowest for the end of August since 2009—against a target level of 80% by November 1, revised down from previous 90%.
• Qatar: During six months of the blockade, the world's second-largest LNG exporter lost approximately $24 billion in revenue, with deliveries in certain periods declining by 96%—an unprecedented supply shock.
• Price Forecasts: With slow normalization of Middle Eastern exports, the December TTF could exceed €100/MWh—twice the early-year baseline estimates.
• Regulatory Factor: The EU's ban on Russian pipeline gas and LNG has been in effect since March 2026 with transitional periods, constraining maneuvering space amid shortages.
• Market Divergence: The Asian JKM hovers around $21–22/MMBtu, whereas the American Henry Hub is below $3/MMBtu despite record production—this spread fuels interest in new U.S. LNG export projects.

Refined Products: Record Low Diesel in the U.S. and Record Refinery Utilization

The latest EIA report recorded U.S. refinery utilization at 97.4%—refining reached 17.4 million barrels per day, while commercial crude oil stocks changed little (428.9 million barrels). The main signal for the refined products market: diesel inventories in the U.S. have dropped to the lowest seasonal level in history. Europe, facing shortages of middle distillates due to the loss of Russian and Middle Eastern volumes, has purchased diesel from Mexico for the first time in seven years. For fuel companies and traders, this means record diesel crack spreads are likely to remain until at least the end of autumn—and the market's heightened sensitivity to any news regarding refinery conditions on both sides of the Atlantic.

Russia: The Fate of Diesel Exports to be Decided Over the Weekend

The domestic fuel market in Russia remains under manual control, with the coming days proving crucial. The current ban on diesel fuel exports for producers expires on September 1; according to industry sources, the government is inclined to extend it at least until the end of September, with discussions also covering an option until the end of 2026. A full ban on gasoline exports is in effect until January 31, 2027, with restrictions also affecting jet fuel. Deputy Prime Minister Alexander Novak states that there is no diesel shortage and that a number of refineries are returning from maintenance, yet drone strikes on processing infrastructure continue to limit output: refining during the summer sank to multi-decade lows, while production in July—around 8.9 million barrels per day—was the lowest in six years. For the global market, this means a reduction in Russian diesel volumes during a peak in European shortages of middle distillates.

Electricity, Renewables, and Coal: The Energy Crisis Extends the Era of Coal, but the Energy Transition Accelerates

Expensive LNG has altered the balance of global electricity production: coal has received an unexpected reprieve and remains the largest individual source of generation, supplying about a third of global output. However, the total of renewable sources—solar, wind, hydro, and bioenergy—is projected by the IEA to surpass coal for the first time in 2026. The regional picture is contrasting:

• In the U.S., solar generation grew by 21% in the first half of the year, with wind and solar contributing about 20% to output, while coal generation declined by approximately 11% due to cheap gas.
• Texas has halted the approval of new data centers, prompting the EIA to lower its forecast for the state's energy consumption growth in 2027 from 14% to 6%—the first significant signal of cooling AI load on the grid.
• In Europe and Asia, expensive LNG makes coal more competitive against gas in electricity generation, sustaining demand for energy coal from exporters—Indonesia, Australia, and South Africa.

Macroeconomic Outlook: Jackson Hole and Interest Rates as a Factor in Energy Demand

An additional benchmark for commodity markets will be the speech by Federal Reserve Chairman Kevin Warsh at the Jackson Hole symposium on Friday. Signals regarding interest rate trajectories directly impact the dollar's value, the cost of financing energy projects, and demand forecasts for oil and gas. A softened rhetoric would support commodity prices, while a firm tone could increase pressure on oil, which is already declining on diplomatic news.

What to Watch Over the Weekend and Next Week: Calendar for Energy Market Participants

1. The official reaction from Caracas and OPEC to reports of a possible Venezuelan exit from the cartel.
2. The Russian government's decision on diesel fuel exports before the prohibition expires on September 1.
3. Actual transit data through the Strait of Hormuz and the fate of the Iran-Oman corridor.
4. The pace of gas injection into EU storage and the dynamics of TTF after retreating from three-year highs.
5. OPEC+ meeting on September 6: a pause in quota increases and discussions on parameters for 2027.
6. Escalation risks along the Russia-Ukraine line and the state of Russian refining.
7. The implications of the Fed Chairman's speech in Jackson Hole for the dollar and commodity markets.

In summary, the oil market is drifting towards a de-escalation scenario in the Middle East but remains hostage to physical flows through the Strait of Hormuz and rising uncertainties within OPEC itself, where Venezuela now looks to exit following the UAE's departure. Gas and diesel are the main points of shortage in the global energy landscape for autumn 2026: Europe is entering the heating season with the lowest stocks in 17 years, while coal receives an extension of its era despite the accelerating energy transition. Daily analytics on oil, gas, renewables, and the energy market can be followed in the Open Oil Market Telegram channel.