Oil and Gas News — Friday, August 28, 2026: Iran and Oman Divide the Strait of Hormuz, Brent Falls to $87, Europe Faces €100 Gas

The global oil and gas market concludes the week with a cautious sense of optimism. Oil and gas news on August 28, 2026, is dominated by one theme: Iran and Oman announced an agreement on the division of the waters of the Strait of Hormuz and the revenues from shipping, marking the first time in six months of war that the market began to price in a scenario of sustainable ceasefire. Brent crude has fallen for the fourth consecutive day, trading around $87 per barrel, losing over 7% for the week. The U.S. sanctions package, dubbed "Economic Pariah," turned out to be milder than expected and did not target China, the main buyer of Iranian oil. However, Europe’s energy sector remains at risk: TTF gas is at a three-year high, and analysts anticipate winter prices above €100/MWh. Below is a structured overview for investors, oil and fuel companies, traders, energy professionals, and participants in the global energy market.

Oil Market: Brent Around $87, WTI Around $82 — A Week of Decline

Oil prices are correcting after a two-week rally. Brent traded near $87 per barrel on Thursday, while WTI hovered around $82. The weekly decline for Brent exceeded 7%, yet the benchmark remains over 40% higher since the beginning of the year: the geopolitical risk premium following the closure of the Strait of Hormuz in February has not disappeared. Key price drivers for oil today include:

Diplomacy in Hormuz: Statements from Tehran and Muscat regarding a temporary shipping corridor and joint demining have become the main bearish factor this week.
Soft Sanctions: Washington refrained from imposing secondary measures against Iran's trading partners, alleviating some concerns over supply cuts.
Physical Flows: Donald Trump mentioned the passage of 10 million barrels of oil through the strait on Tuesday, whereas Kpler recorded only five commercial vessels compared to an average of 15 over ten days. This data discrepancy is preventing traders from making aggressive sales.
Russian Risk: Reports of Moscow preparing for escalation in Ukraine briefly pushed the market up on Wednesday before news from Oman caused prices to decline.
Saudi Logistics: Satellite images indicate an increase in shipments from Saudi Aramco at terminals within the Persian Gulf, as Riyadh adjusts its exports amid threats from the Houthis to the Red Sea.

Analysts at MST Marquee describe the market as being in a "waiting mode": after a series of failed ceasefires, investors are hesitant to play the de-escalation until a deal between Tehran and Washington is confirmed.

Strait of Hormuz: Iran-Oman Agreement and U.S. Position

The key event of the week for the global oil and LNG market is the progress in negotiations between Iran and Oman. On Tuesday, the foreign ministers of both countries discussed a "preliminary framework" for the resumption of shipping, and on Wednesday, an IRGC representative announced that agreements had been reached. The main elements include:

Establishment of a temporary joint shipping corridor through the strait.
Joint demining project for the waters.
Division of the strait's waters and transit revenues between Iran and Oman.
Negotiations on a permanent route within 30–60 days.

Tehran emphasizes that the agreement with Oman does not automatically mean the strait will open, and the IRGC directly accuses the U.S. of delaying the process. The parties missed the 60-day window of the June memorandum, the formal ceasefire mechanism is closed, and now the Oman-Iran track is viewed as a prelude to a direct deal with Washington. A positive signal is the reports of the U.S. preparing to return diplomats to evacuated embassies in the Middle East. A negative signal is the tanker struck by an unidentified projectile off the coast of Oman on August 25: shipping safety has not been restored, and insurance rates remain prohibitive.

Sanctions "Economic Pariah": Impact Less Severe Than Market Feared

The campaign announced by U.S. Treasury Secretary Scott Bissen, dubbed "economic D-Day," appeared more as a signal than a devastating blow by Thursday. The Treasury focused on Bank Melli, smuggling networks, and "zero leakage" of currency revenues but did not impose secondary sanctions on China, India, or Turkey. For the oil market, this means that about 340,000 barrels per day of Iranian exports to China are still intact. Within Iran, pressure is mounting: inflation is approaching 90%, and President Masoud Pezeshkian publicly states that the country "cannot fight forever," defending the June memorandum. This combination of economic exhaustion and a diplomatic window is shaping the investors' base scenario for the fall—a gradual recovery of flows through Hormuz while maintaining high volatility.

U.S. Supplies: Record Low Diesel and Record Refinery Utilization

The weekly EIA report for the week ending August 21 showed an increase in commercial oil inventories of only 0.1 million barrels, to 428.9 million—1% above the five-year average. U.S. refinery utilization reached 97.4% with a processing rate of 17.4 million barrels per day, gasoline output increased to 9.8 million barrels per day, while distillates decreased to 5.1 million. Oil imports fell by 435,000 barrels per day to 6.2 million. The main signal for the refined products market: diesel stocks in the U.S. have fallen to their lowest seasonal level on record. Europe, facing a shortage of middle distillates, has purchased diesel from Mexico for the first time in seven years. For fuel companies and traders, this means that record crack spreads for diesel will likely remain until at least the end of fall.

Gas and LNG: Europe Between €65 and €100 per Megawatt-Hour

The gas market remains the most vulnerable segment of the global energy sector. TTF futures rose above €68/MWh on Tuesday—the highest since early 2023—but dropped below €67 by Thursday due to news from Oman. The fundamental picture remains unchanged:

Storage: EU gas storage is filled to only ~61% with a target level of 80% by November 1 (lowered from 90%). Wood Mackenzie estimates the "best-case scenario" at 75% with a full recovery of Qatari exports by the end of September; if the strait remains closed for another two months—below 70%.
Price Forecasts: Goldman Sachs suggests that December TTF must exceed €100/MWh with the gradual normalization of Middle Eastern exports by 2027—twice the baseline forecast of €50. Morningstar sees a range of €90–120 in the event of a cold winter.
LNG Supply: New Qatari capacities will not reach full utilization before the second half of 2027; starting January 2027, the EU will impose a ban on Russian LNG. Europe may need about 64 billion cubic meters of U.S. LNG.
Asia: Spot JKM remains around $21–22/MMBtu; Japan, Korea, and Taiwan are hedging risks with coal and the restart of nuclear power plants.
U.S.: Henry Hub below $3/MMBtu with record production of ~122.5 billion cubic feet per day; scheduled maintenance at Corpus Christi LNG has temporarily reduced feedstock demand.

OPEC+ and Russia: Paper Quotas and Declining Output

OPEC+ will meet on September 6 to decide on October’s quotas; the baseline scenario is a pause in quota increases until the end of the year while maintaining about 2 million barrels per day cuts from 2022 and preparing for talks on quotas for 2027, where Iraq is pushing for a higher level. Actual output of the alliance remains millions of barrels below February's production levels.

Russia vividly illustrates the gap between quotas and reality. According to OPEC's secondary sources, output in July fell to 8.89 million barrels per day—the lowest in six years and nearly 1 million below the allowable level. Refinery throughput in July dropped to 3.6 million barrels per day, the worst figure since 2002. Maritime oil exports in the four weeks ending August 23 dropped to 3.46 million barrels per day; strikes on Novorossiysk forced the diversion of Kazakh barrels to the Black Sea, freeing up Ust-Luga for Russians. The volume of Russian oil at sea has fallen to 83 million barrels—the lowest in a year, and export revenue dropped to $1.65 billion per week. China and India remain the main buyers, with supplies averaging about 3.29 million barrels per day. Analysts estimate losses to Russian supply from strikes on infrastructure at 10%, while losses for refined products are significantly higher.

Russian Fuel Market: Diesel Export Fate to be Decided by September 1

The domestic fuel market in Russia remains under manual control. The ban on gasoline exports is in effect until January 31, 2027, and on jet fuel until the end of November. The ban on diesel fuel exports for producers expires on September 1, and, according to industry sources, the government is leaning towards an extension at least until the end of September, with discussions also about a potential extension until the end of the year. Deputy Prime Minister Alexander Novak stated there are no issues with diesel logistics and the return of several refineries from maintenance; however, in August, shortages returned to certain regions after a short respite. To fill the market, imports from Belarus and Asia are being used, along with a temporary reduction of the trading sale quota to 2%. For the global refined products market, this means a loss of Russian diesel volumes during a peak European deficit.

Electric Power, Renewable Energy, and Coal: Energy Crisis Extends the Era of Coal

The war in the Middle East has rewritten forecasts for the electric power sector. The IEA expects coal generation in 2026 to reach about 10,974 TWh—almost a third of global production at 33,313 TWh and 77% more than wind and solar combined. Gas generation, which was expected to grow by 1.3%, will remain at last year's levels: expensive LNG has made coal more competitive in Europe and Asia. Meanwhile, the energy transition accelerates where there are domestic resources:

In the U.S., solar generation increased by 21% in the first half of the year, hydro by 9%, and wind by 6%; together, wind and solar contributed to 20% of output and, for the first time, surpassed both coal and nuclear combined.
Coal generation in the U.S. dropped by 10% to 323 TWh, while coal exports are projected at 102 million short tons due to demand from Asia.
Texas has halted the approval of new data centers, and the EIA has reduced its growth forecast for the state's load in 2027 from 14% to 6%.
U.S. tariffs on polysilicon and solar modules, effective August 6, increase the costs of new renewable energy projects.

What to Watch on Friday, August 28: Calendar for Energy Market Participants

The U.S. reaction to the Iran-Oman agreement and signals of renewed direct contacts.
Kpler data on transit through the Strait of Hormuz and investigation into the tanker attack.
The Russian government's decision on diesel fuel exports after September 1.
Injection rates in European gas storage and the weekly close for TTF amid three-year highs.
The number of Baker Hughes rigs and U.S. macro statistics influencing demand forecasts.
The threat from Houthis to the Red Sea and the restructuring of Saudi export logistics.
Preparations for the OPEC+ meeting on September 6 and signals of a pause in quota increases.

The week’s outcome: the oil market drifts towards a de-escalation scenario but remains hostage to the physical flows through Hormuz, where the data from the White House and tracking companies diverge significantly. Gas and refined products—diesel in the U.S. and Europe, LNG for EU storage—have become the main points of deficit in the global energy landscape for the fall of 2026, while coal has received an unintended reprieve in the energy transition. For daily analytics on oil, gas, renewables, and the energy market, follow the Open Oil Market Telegram channel.