Energy Sector News – Friday, August 1, 2025: Brent Remains Above $72; European Gas Storage at Record Levels

At the beginning of August, the global fuel and energy sector is showing moderate growth and signs of stabilization. Oil prices remain high, with Brent holding above $72 per barrel, reaching its peak since late June amid ongoing geopolitical risks and strong seasonal demand. The European gas market is relatively calm due to record filling of underground gas storage ahead of winter. Simultaneously, regulators and market participants are taking steps to maintain balance: from August 1, the OPEC+ alliance is commencing a planned increase in oil production to avoid supply shortages, while the U.S. Federal Reserve's decision to keep interest rates unchanged signals stability in macroeconomic conditions and supports investor optimism. In Russia, an export ban on gasoline remains in effect, aimed at cooling domestic fuel prices during the peak summer demand period. Below is a detailed overview of key events and trends in the oil, gas, electricity, and other sectors of the energy industry as of August 1, 2025.

Oil Market: Brent Remains Above $72, Demand and Risks Support Prices

Oil prices are holding at recent highs, with North Sea Brent trading around a multi-week peak, exceeding the psychologically important level of $72 per barrel. American WTI is hovering around $69. The pricing uptick is fueled by several factors:

• U.S. Trade De-escalation with Partners. The framework agreement between Washington and Brussels has helped avoid an escalation of the trade dispute. The parties agreed on mutual tariff reductions and a significant increase in American energy exports to Europe, which has improved investor sentiment and raised expectations for growth in U.S. oil and gas demand. Additionally, the U.S. has intensified dialogue with India to reduce trade barriers, easing global tensions.
• Geopolitical Risks and Sanctions. President Donald Trump has escalated rhetoric towards Moscow, issuing an ultimatum to resolve the conflict in Ukraine within about 10 days. He threatened to impose 100% tariffs on Russian exports and secondary sanctions against countries buying Russian oil if no progress is made. These statements have heightened uncertainty regarding global supplies and added a “risk premium” to the price of oil.
• OPEC+ Actions. Oil alliance countries are gradually increasing supply. From August, total production quotas are officially raised by about 548,000 barrels per day (even more than originally planned); a similar increase is expected in September. Recently, the OPEC+ Joint Ministerial Monitoring Committee confirmed its commitment to the deal and readiness to increase production to prevent shortages in the fall—these signals temper further price growth.

As a result of the cumulative influence of these factors, the oil market remains relatively balanced. Brent has secured a range of ~$70–72 per barrel: the recent growth momentum is tempered by expectations of increased supplies from OPEC+. Despite price increases in recent weeks, the current level is still 10-15% below year-ago figures—a reflection of the market correction following the peaks of the energy crisis in 2022-2023. Investors continue to monitor external economic signals: negotiations between the U.S. and China on trade disputes are ongoing, and the July 30 meeting of the U.S. Federal Reserve indeed left rates unchanged. Soft monetary conditions combined with the resolution of trade differences could support fuel demand in the latter half of the year.

Gas Market: Record Storage for Winter and Relative Price Stability

The focus in the gas market remains on Europe, where EU countries are rapidly filling underground gas storage in preparation for the winter heating season. By the end of July, European UGS facilities were over 72% full (up from ~59% a month prior), equivalent to over 75 billion cubic meters of gas. Although the filling rate slowed in July compared to the record 12–13 billion m³ injected in June, the EU has managed to significantly close the gap from last year's filling schedule. The target of achieving at least 90% storage capacity by the beginning of the heating season now appears attainable.

Gas prices remain elevated, though volatility is low. The European benchmark TTF price hovers around $400 per thousand cubic meters, approximately in line with the same period last year. The summer heat in Western Europe increases the load on energy systems (massive air conditioning usage), partially raising gas consumption at power plants. Simultaneously, sunny weather enables high solar power generation, helping to restrain gas demand during peak load hours. Stable liquefied natural gas (LNG) supplies, along with relatively weak industrial demand, maintain market balance. Overall, European prices are currently significantly lower than the crisis peaks of 2022; however, any supply disruptions or an early cold snap in the autumn could raise volatility again. Record-high storage levels reduce the likelihood of sharp price spikes this winter, which is positively perceived by investors and industrial consumers. Meanwhile, market participants are closely monitoring the EU's further steps to strengthen energy security, including discussions about new targets for storage filling and potential restrictions on Russian gas imports.

Global Agreements and Policy: Trade De-escalation vs Sanction Pressure

In the international arena, two opposing trends are notably interwoven: de-escalation of trade conflicts between major economies and increasing geopolitical rhetoric. On one hand, a key recent event has been the trade-energy deal between the U.S. and the EU, accompanied by a reduction in trade disputes. Washington and Brussels have developed agreements aimed at preventing a new tariff war: mutual tariff reductions and increased U.S. energy exports to Europe were agreed upon. The energy component of the agreement benefits both sides: the EU gains additional supply guarantees for gas and oil, while the U.S. secures expanded markets and capital influx from increased exports. This positive trading signal has reinforced market confidence in the stability of future energy resource demand.

On the other hand, the U.S. administration continues to ramp up pressure on Moscow. In late July, President Trump significantly shortened the timeframe set for achieving a ceasefire in Ukraine (an ultimatum of about 10 days) and indicated that he is "not concerned" about market reactions to potential new stringent measures against Russia. This refers to the potential introduction of maximum tariffs on Russian goods and secondary sanctions against buyers of Russian energy resources. The prospect of such actions keeps market participants on edge, given the risks to global oil and petroleum product supply chains. Thus, globally, processes of trade de-escalation between leading economies and the intensification of sanction rhetoric are currently unfolding simultaneously. The outcome of these processes will largely define the conditions of global energy resource trading. Investors are closely watching whether the economic benefits of new export agreements outweigh the potential negatives of sanction limitations—this will determine the long-term supply-demand relationship in global oil and gas markets.

Electricity and Renewables: Record Consumption and Growth of “Green” Generation

Unusual weather this summer is setting new records in the energy sector and underscores the importance of renewable energy sources (RES). In China, July saw unprecedented load on the energy system: peak electricity consumption reached an all-time high of around 1.5 TWh. This level is attributable to extreme heat and mass air conditioning usage. However, a significant portion of the generation increase was provided by solar power plants, along with increased hydropower generation compared to last year—this helped partially offset the surge in demand and avoid severe disruptions.

In the U.S., the rapid development of RES is significantly changing the generation structure. As of mid-2025, the share of wind and solar generation has reached around 24%, surpassing that of coal and closely approaching that of nuclear power plants (each of these traditional categories now contributes less than 20% of generation). Together with hydro and other sources, over 30% of electricity in the U.S. is produced using green technologies—a record figure. Thus, for the first time, wind and solar energy in the U.S. have surpassed coal in significance and are gradually catching up to nuclear generation.

For Europe, increasing the share of RES has also become a strategic trend, especially after the recent energy crisis. As recently as 2023, some EU countries temporarily ramped up coal generation due to gas shortages, leading to a spike in CO₂ emissions and record growth in electricity prices. However, by 2025, the situation has stabilized: gas storages are filled, new wind and solar power plants have been commissioned, and coal's share in the EU energy balance is falling again. Despite new temperature records (for example, extreme heat in late July caused water overheating at some nuclear power plants, complicating their cooling), Europe’s energy system is managing peak loads without significant outages. Grid operators are implementing heightened readiness modes on days of extreme heat, and renewable sources are taking on an increasing share of demand coverage. Overall, summer 2025 demonstrates resilience in the electricity sector: even under challenging conditions, consumers are supplied with electricity, largely thanks to record levels of RES generation.

Coal Sector: High Demand Amid Stable Prices

Coal continues to play a notable role in the energy balance of many countries, despite the global push for decarbonization. According to the International Energy Agency (IEA), global coal consumption in 2025 is expected to remain close to record levels and may even set a new high. Global production is expected to be around ~9.2 billion tons, primarily due to increased coal use in Asia. In countries like India and several Southeast Asian nations, coal-fired electricity generation continues to grow to meet the rising demand.

The largest consumer of coal—China—is likely to maintain its burning levels at that of last year or slightly reduce them in 2025 (a decline of less than 1% is expected compared to 2024). Meanwhile, European countries, having filled their gas storages and commissioned new RES capacities, are actively reducing coal-based generation. Following a surge in coal generation in 2022-2023 (when coal temporarily replaced costly gas), coal's share in the EU energy system is once again declining. However, coal remains an important energy source for several Eastern European economies—such as Poland, the Czech Republic, and Greece—where its share in generation is still significant.

In recent months, global coal prices have shown moderate dynamics. Futures for thermal coal (API2 index) are trading in the range of $110–120 per ton (Rotterdam port, end of July). This is slightly above early summer levels (with prices rising by ~5–7% over the month) but significantly below prices a year ago (in summer 2024 coal was 15–20% more expensive). This pricing picture reflects a balance: on one hand, global demand for coal remains high (especially during hot periods when coal is actively used to cover peak loads); on the other hand, supply in the market is adequate and consumers have formed significant inventories. Major exporters—such as Australia, Indonesia, Russia, and South Africa—are maintaining stable shipment volumes. In developed countries, there continues to be a trend towards reducing coal generation: environmental regulations and taxation policies make new coal projects less attractive. However, as noted, some Asian nations are temporarily increasing coal burning to avoid purchasing expensive gas. As a result, global coal consumption is currently holding steady. IEA analysts expect a gradual decline in global coal demand to begin in 2026—provided there is an acceleration of the energy transition and a shift in the Chinese economy towards gas and RES. In the meantime, the coal sector remains a crucial component of energy supply, achieving nearly record levels of electricity generation worldwide.

Oil Products and Refining: Regional Contrasts

The oil products market varies across different parts of the world. In Russia, authorities have taken an unprecedented step to stabilize fuel prices. As of August 1, a temporary total ban on the export of automotive gasoline for all companies, including major producers and refineries, is in effect until August 31, 2025. This emergency measure is designed to prevent fuel shortages in the domestic market and curb surging prices during the peak summer demand (holiday season and harvest campaign). Previously, restrictions applied only to traders and small refiners, but by the end of July wholesale gasoline prices had hit historical highs, forcing the government to resort to administrative measures. Russian refineries are now directing virtually all gasoline volume to the domestic market. It is expected that the increase in supply on the exchange will cool prices, which reached record levels in June and July. Following news regarding the imminent embargo in late July, exchange prices indeed stopped rising: by July 25, the price of Ai-92 gasoline declined by about 1.5%, and Ai-95 by 1.1%, anticipating the introduction of the ban.

Nevertheless, retail fuel prices continued to creep upward: according to Rosstat, during the last week of July, gasoline at filling stations rose by another 0.3% (for the year, the increase is ~4.6%, slightly above overall inflation of ~4.5%). As of July 31, exchange prices for automotive gasoline remained near peak values. The government signaled that it does not rule out extending the export ban beyond August 31 if there is no significant stabilization in wholesale and retail segments.

"Amid declining refining profits, exchange prices are likely to remain around current levels, regardless of whether the export ban is extended," said Sergey Tereshkin, RBC.

Thus, Russia's example illustrates that even one of the largest gasoline exporters is ready to limit external sales to protect domestic consumers—this underscores the existence of local fuel imbalances in various regions of the world. A contrasting situation is observed in the U.S., where the domestic fuel market is experiencing relative abundance. Thanks to high refining volumes at American refineries and unusually weak summer demand, gasoline prices in the U.S. have dropped to their lowest levels in recent years. The national average price of gasoline after Independence Day fell to ~$3.14 per gallon (about $0.83 per liter)—a record low for the summer season since 2021. Analysts note that during August-September, the national average could break the psychological mark of $3/gallon, which has not happened since spring 2021.

The reasons for the decline in fuel prices in the U.S. are manifold. Firstly, summer demand has been somewhat weaker than expected: according to the U.S. Department of Energy, gasoline consumption in early July was 1-2% lower than a year ago. The abnormal heat in the South has partially reduced longer road trips; furthermore, the spread of remote work and cost-saving measures is lowering drivers' mileage. Secondly, gasoline supply has risen: American refineries are running at high capacity, and imports of fuel from Europe and Canada have sharply increased on the East Coast. In June, the U.S. imported around 100,000 barrels of gasoline per day—the highest in over a year. Wholesale bases and inventories are filled, leading to lower wholesale prices and the transfer of this dynamic to retail. Thirdly, relatively low oil prices in the first half of the year (WTI quotes are currently ~20% lower than a year ago) have reduced costs for refiners, allowing them to partially pass this benefit on to end consumers.

The decline in fuel prices in the U.S. aligns with an improved refining situation. Spring refinery maintenance has been completed, and gasoline and diesel production is at seasonally high levels. An additional factor is the actions of OPEC+: the cartel’s increase in oil production in August enhances raw material availability and exerts downward pressure on global oil prices, indirectly easing further gasoline price declines. In other words, the current market conditions for oil products in the U.S. favor consumers: supply exceeds demand, and prices are gradually falling without signs of shortage.

In Europe, the situation with motor fuel prices is relatively stable. After the upheavals of 2022-2023, during which sanctions and logistics restructuring led to sharp price fluctuations, gasoline and diesel markets have stabilized in 2025. Wholesale prices for gasoline are now close to early-year levels and significantly lower than last year's peaks. Contributing factors include relatively cheap oil (~$70 versus >$100 a year ago) and a successful reorientation of oil product imports: the EU has established stable diesel supply channels from the Middle East, Asia, and the U.S. to replace lost Russian volumes. As expensive fuel purchased by European importers last winter is consumed and replaced with cheaper supplies, gasoline stations in the EU are gradually lowering retail prices. However, due to high taxes and levies, gasoline in Europe remains expensive for end consumers—prices in the largest EU economies hover around €1.6-1.8 per liter at the filling stations.

Overall, the global oil products market is currently not experiencing acute shortages, though regional disparities persist. In some developing countries (for example, Pakistan, Bangladesh, and several African nations), the high cost of imported fuel creates tension—governments are forced to subsidize gasoline for the population to avoid social discontent. Meanwhile, in the Middle East and India, refining is booming: local refineries, oriented towards exporting diesel and jet fuel, are operating at maximum capacity, saturating the global market with oil products. On the other hand, structural changes in the industry—such as the closure of several outdated refineries in Western Europe and the U.S. (including the decommissioning of some facilities in California)—pose risks of localized supply reductions in the future. However, as of now, summer 2025 is relatively quiet for the oil products market: fuel prices are either decreasing or stabilizing, and consumers around the world are generally supplied with gasoline and diesel without interruptions.

Prospects: What to Watch for

• Monetary Policy: Further central bank decisions (primarily by the U.S. Federal Reserve) on interest rates and the dynamics of the dollar may reflect on borrowing costs, investment, and consequently, demand for energy resources.
• Sanctions and Trade Disputes: Developments in the sanction rhetoric surrounding Russia (including possible new U.S. restrictions) and the progress of U.S. trade talks with China, India, and other countries will impact global oil and gas supply chains.
• Economic Growth and Demand: Macroeconomic indicators in key countries—GDP and industrial growth rates in China, the U.S., Europe, and India—will determine the dynamics of oil, gas, and electricity consumption. Strong data (e.g., a 3% GDP growth in the U.S. in Q2 2025) supports optimism, but economic slowdowns in any region could cool fuel demand.
• Filling Gas Storage: Progress in Europe towards achieving the goal of 90% filling of UGS facilities before the heating season and securing alternative gas supplies will determine the pricing situation in the gas market in the fall and winter.
• OPEC+ Actions: The implementation of planned oil production increases by OPEC+ countries and decisions that may be made at upcoming alliance meetings will influence market balance and oil price dynamics.
• Fuel Market in Russia: The effect of the export ban on gasoline in the Russian Federation and subsequent authorities' decisions (lifting or extending the ban after August) will impact domestic fuel prices and the potential for Russian export supplies.