Oil Market: Brent Returns Above $85 per Barrel
Oil prices are starting the week with a confident rise. On Monday, the October Brent futures on the ICE exchange climbed above $85 per barrel (+3.2% for the session), while U.S. WTI traded around $79.5–79.8, and Russian Urals hovered around $79. The driving force behind the increase has been the heightened uncertainty surrounding the timing of the opening of the Strait of Hormuz: the market, which just a week ago had anticipated a swift de-escalation and declining prices, is now forced to reinstate the "geopolitical premium" in the quotations.
Key pricing factors in the oil market currently include:
- Hormuz Factor: Under normal conditions, about one-fifth of global oil supplies and significant volumes of liquefied natural gas (LNG) transit through the strait. The partial blockade, in place since late February, remains the primary source of volatility.
- OPEC+ Supply: The alliance is set to conclude the return of voluntary cuts in September, adding another 188,000 barrels per day to the market.
- Macroeconomics: Weak U.S. employment data has intensified expectations for a softening of Fed policy, which supports commodity assets, but simultaneously signals risks for fuel demand.
Analysts note that, with a comprehensive deal regarding the strait, Brent could quickly adjust to the $70–75 range, whereas a breakdown in negotiations could push quotes back to spring highs above $90.
The Hormuz Strait: Deal Close, but Tehran Raises Stakes
The diplomatic process surrounding the world's main oil artery has reached a decisive stage. Iran and Oman have agreed on a unified corridor for vessel movement and, according to statements from the Iranian Foreign Ministry, are at the final stage of creating a joint mechanism for navigation management. Washington, for its part, is prepared to lift the blockade on Iranian ports after an agreement is reached, and the U.S. president has previously canceled military strikes in favor of a settlement.
However, over the past weekend, Tehran sharply hardened its stance, conditioning the opening of the strait on the fulfillment of several demands:
- Cancellation of sanction limitations concerning the Iranian economy;
- Payment of compensation for damages incurred during the conflict;
- U.S. withdrawal from interference in regional negotiation formats.
The outcome of this negotiation is a central event for the global oil and gas market in the coming weeks: it will affect freight rates, insurance premiums, supply routes for Middle Eastern oil and LNG to Asia and Europe, as well as the price trajectory for energy resources through the end of the year.
OPEC+: Last Step of the Production Increase Cycle
Seven OPEC+ countries—Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—have agreed to increase quotas for September by 188,000 barrels per day, repeating the parameters of the last three months. With this decision, the alliance effectively concludes the rollback of voluntary cuts of 1.65 million barrels per day that have been in place since 2023. After September, any further production increases are planned to be paused until the end of 2026, while limitations of approximately 2 million barrels per day from the 2022 framework remain in force. The next ministerial meeting is scheduled for September 6. For the market, this means that the supply factor from OPEC+ for the coming months becomes predictable, shifting the focus 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 concerning in recent years. According to Gas Infrastructure Europe, the fill level of EU gas storage facilities stands at about 58.8%—the lowest for early August in 15 years of observation and 16.5 percentage points below the five-year average. Storage facilities contain around 62–64 billion cubic meters of gas—nearly 14 billion cubic meters less than a year ago.
The reasons for the current deficit include:
- Abnormal Heat: In July, Europe withdrew about 1 billion cubic meters of gas from storage for cooling and electricity generation needs—setting a record summer withdrawal since 2022;
- Declining LNG Imports: August LNG supplies are estimated at around 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 near multi-month highs (approximately $690 per thousand cubic meters), making injections economically burdensome.
The EU has already lowered the target fill level for storage ahead of the heating season from 90% to 80%, but achieving even this level will require a significant increase in injection rates. Europe’s gas balance for the winter of 2026–2027 will critically depend on weather conditions, competition with Asia for LNG, and the situation in the Hormuz Strait, through which Qatari LNG flows.
Russian Fuel Market: Export Ban as the New Norm
The domestic fuel market in Russia 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 is in effect until August 31, 2026, although starting September 1, diesel, marine fuel, and gas oils exported by direct producers will be exempt from restrictions.
Measures to stabilize the fuel market include:
- Priority saturation of the domestic market amid unscheduled refinery shutdowns following drone attacks and repairs;
- A temporary procedure for guaranteed gasoline and diesel supplies to agricultural producers during the harvesting campaign—agreements between the Ministry of Energy, Ministry of Agriculture, regions, and oil companies are in effect until November 1;
- Tax amendments and a dampening mechanism to stimulate refining and retain fuel within the country;
- Permission to use straight-run gasoline mixtures for producing high-octane fuels.
For the global petroleum products market, the exit of Russian gasoline and part of the diesel volumes from export routes indicates a tighter balance and support for crack spreads, especially in the Mediterranean, Africa, and Latin America.
Asia: India and China Strengthen Role as Anchor Buyers
Asian consumers remain the main center of attraction for raw material flows. The export of Russian oil to India increased in July, driven by price discounts and a reconfiguration of logistics amid the Middle Eastern crisis. China is ramping up purchases of pipeline gas and continues to balance between imports and domestic production, increasing its hydrocarbon output. The slowdown in inflation in China as oil shocks ease signals a gradual adaptation of the world’s second-largest economy to the new price reality. The competition between Asia and Europe for available LNG volumes will be a key intrigue of the upcoming winter.
Energy Sector: AI and Data Centers Reshape Demand
A structural theme in the global energy market 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 stations and extending the lifespan of coal units to meet the baseline load of data centers. In Russia, there are plans to locate data centers in energy-sufficient regions with gas, coal, and atomic generation, as well as near Siberian hydropower plants. Investors are increasingly viewing the energy sector as a “second derivative” of the AI boom—from network companies to turbine manufacturers and energy storage systems.
Renewable Energy and Energy Transition: Growth Continues, but Balance Becomes Complex
Renewable energy continues to maintain high rates of capacity additions: solar and wind generation are breaking records in China, Europe, and the U.S., while in Central Asia, renewable energy production is increasing by over 20% year-on-year. However, energy systems are increasingly feeling the need for flexible capacities and storage: the hot summer of 2026 demonstrated that peak demand for air conditioning and data center needs cannot yet be met without traditional generation. The investment focus is shifting from merely 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 sources: sustained demand in Asia and a new factor—the energy supply for data centers. The loading of Russian coal in the eastern direction is reaching record levels—over 10 million tons per month, reflecting the reorientation of exports toward the Asia-Pacific markets. In India and Southeast Asia, coal generation remains the backbone of the energy balance, and high gas prices in Europe support the competitiveness of coal in the global electric power industry, despite climate concerns.
Forecast: What Market Participants Should Watch on August 11
Key indicators for investors and energy sector companies for the day include:
- Negotiations on the Hormuz Strait—any statements from Tehran, Muscat, and Washington will be instantaneously reflected in the quotations of Brent, WTI, and freight rates;
- Trends in gas injection into European storage facilities and prices at the TTF hub—an indicator of the region's readiness for winter;
- U.S. oil stock statistics and signals from the Fed regarding the trajectory of interest rates;
- The situation in the Russian fuel market—exchange prices for gasoline and diesel amid the export ban;
- Corporate news from energy companies related to AI infrastructure projects.
The baseline scenario for the coming sessions anticipates Brent maintaining within the corridor of $80–87 per barrel amid heightened volatility: the oil, gas, and electricity markets continue to operate in the rhythm of diplomacy surrounding the Persian Gulf and preparations in the Northern Hemisphere for an unusual winter.
