Energy Sector News, Sunday, July 27, 2025: Brent Near $70, Record Gas Storage, Fuel Price Stabilization

The latest review of the fuel and energy sector examines key events and trends as of July 27, 2025. The global oil market is showing cautious price growth, with Brent crude stabilizing around $70 per barrel amid optimism in trade negotiations and coordinated actions by producers. European gas storage facilities continue to fill at record rates, reducing risks for the upcoming winter. In the Russian domestic market, emergency measures are being implemented to stabilize fuel prices: a complete ban on gasoline exports is being discussed, and the causes of the fuel shortage are being investigated. Additionally, we will explore the coal industry, the rapid development of renewable energy sources (RES), changes in the electricity sector, and geopolitical factors that are reshaping global energy resource trade. This information will be useful for investors and participants in the energy sector market, from oil and gas companies to electricity specialists, coal sector experts, and RES stakeholders.

Oil Market: Cautious Price Growth Amid Trade Optimism and Supply Increase

By the end of the week, oil prices are relatively stable: Brent is holding around $69–70 per barrel. Market dynamics are shaped by a balance between supportive factors and restraining risks.

• Increase in Demand and Optimism. Market participants are encouraged by progress in U.S. trade negotiations with partners. Washington has already secured an agreement with Japan and is close to deals with the European Union. India expressed confidence in reaching an agreement with the U.S. before August 1 — the date for the planned introduction of new American tariffs. These moves alleviate concerns about a slowdown in the global economy and support global oil demand. The summer vacation and travel season also contribute to increased gasoline and jet fuel consumption in the U.S. and China. Major producers forecast additional growth in global oil consumption for the second half of the year of approximately 1.2–1.3 million barrels per day.
• OPEC+ Supply. The OPEC+ alliance is gradually increasing production after a period of constraints. In June, production in Russia reached ~9.19 million barrels per day, exceeding the established quota (9.05 million) by approximately 140,000 barrels. Several other large producers (Saudi Arabia, Iraq, UAE, Kuwait) are also exceeding quotas, while some participants (e.g., Nigeria) remain below their limits. From April to July 2025, the total OPEC+ quota increased by 411,000 barrels per day each month, with a one-time increase of another 548,000 barrels per day expected in August. Additionally, there are signals of increased supply from Venezuela: American company Chevron has received the right to restart production there, which could bring over 200,000 barrels per day back to the market. The increase in supply, along with ongoing risks of a slowdown in the global economy, exerts a "cooling" effect on prices.
• Macroeconomic Factors. At the end of the last week, commercial oil inventories in the U.S. decreased more than expected, indicating resilient demand and preventing a sharp drop in prices. At the same time, expectations of monetary policy easing in major economies fuel investor interest in commodity assets, including oil.

As a result, by the end of the week, the oil market is in a state of relative equilibrium. Brent prices have settled in the upper range of recent months, although they remain sensitive to any news regarding economic risks or changes in OPEC+ policy.

Gas Market: Record Storage Levels Reduce Price Risks

The European natural gas market continues to build inventories ahead of the winter season. According to Gas Infrastructure Europe, underground gas storage facilities in EU countries are nearly 66% full—an unprecedented high for the end of July in recent years. In absolute terms, reserves exceed 72 billion cubic meters (significantly more than a year ago on the same date). The pace of fuel injection is also at record levels: in June alone, European companies injected around 12.4 billion cubic meters, the highest monthly volume in the past three years. This has been aided by a mild winter, decreased demand, and high liquefied natural gas (LNG) supplies—around 12 billion cubic meters in June, mainly from the U.S., Qatar, and other exporters—which is also a record for summer months.

Thanks to high supplies and diversified sources, gas prices in Europe have remained relatively stable during the summer of 2025. Prices at the TTF hub are significantly below the peaks of 2022 and fluctuate within a consumer-friendly range. However, the current price level is still above pre-crisis averages. According to the IEA, wholesale gas prices in Europe from 2025 to 2026 will remain above $400 per 1,000 cubic meters due to structural market factors—this is noticeably higher than the historical norm, although significantly lower than the peaks of the crisis period. Overall, the record high levels of storage reduce the likelihood of sharp price fluctuations this winter, which is positively perceived by investors and industrial gas consumers. Meanwhile, market participants are closely monitoring the EU's further steps to enhance energy security—including the introduction of new target levels for storage and potential restrictions on Russian gas imports currently under political discussion.

Russian Fuel Market: Stabilization Measures and Price Reactions

The internal market for petroleum products in Russia is experiencing a tense situation this summer, associated with the rapid rise in prices for gasoline and diesel fuel. In July, exchange prices for automotive gasoline at the St. Petersburg International Mercantile Exchange reached historical highs (the AI-95 grade exceeded 75,000 rubles per ton), putting additional pressure on independent gas stations and consumers. The reasons include a combination of seasonal factors—high summer demand (including from agricultural producers and tourists)—and supply constraints. Several refineries ceased operations for scheduled maintenance in June–July, reducing gasoline and diesel output. Furthermore, some major players, as determined by the Federal Antimonopoly Service (FAS), significantly reduced their sales volumes on the exchange: the FAS opened a case against a Gazprom subsidiary for cutting sales of AI-92 gasoline by 74% and AI-95 by 50% in late spring, which may have triggered fuel shortages and price surges.

The government, together with oil companies, is swiftly developing a range of measures to stabilize the situation. The main steps include:

• Ban on Gasoline Exports. A complete ban on the export of automotive gasoline for all producers is being discussed, effective August 1, 2025, for at least one month. (Previously, a partial embargo on gasoline exports for independent traders has been in effect since March; now, the restriction may extend to the entire market to direct additional volumes of fuel to domestic needs.)
• Enhanced Monitoring and Dampening Mechanism. Monitoring of fuel trading has been intensified, and a dampening mechanism restricting excess profits from exports (when prices exceed a certain threshold, payments to oil producers are reduced) has been activated.
• Mandatory Sale on the Exchange. An increase in the regulations for mandatory sales of fuel on the exchange (from the current 15% of production for gasoline) is being considered to enhance trading liquidity and saturate the market with supply.

In August, the growth of retail fuel prices is expected to significantly slow down as oil companies strive to maintain prices, anticipating the prompt lifting of the export ban. However, restrictions are likely to remain in place into September—their cancellation can be expected only closer to the cold season when fuel demand begins to decline.

The market has already reacted to the announced interventions: in the second half of July, wholesale prices stopped rising. As of July 25, AI-92 gasoline fell by about 1.5% (to ~65,300 rubles per ton), and AI-95 by 1.1% (to ~75,400 rubles per ton) in anticipation of the export ban. Although prices remain close to record levels, signals of governmental intervention have indicated a trend towards stabilization. Diesel fuel, experiencing less shortage, has shown little price increase. Experts note that the further price dynamics will depend on the duration of export restrictions and the effectiveness of other measures. It is likely that administrative measures will help mitigate fuel price increases through August and September. However, if the ban is lifted in the fall, another price surge may be possible if the root causes of the crisis—low gasoline inventories and maintenance downtimes at refineries—are not addressed. The government must balance between the necessity of keeping prices stable in the domestic market and creating incentives for oil producers to avoid fuel shortages during the harvest campaign and the onset of the fall season.

Coal Industry: Record Production Amid Moderate Demand

The global coal sector is reaching a new peak in production in 2025, although consumption growth is slowing down. The IEA predicts that global coal production this year could reach around 9.2 billion tons—this would be a historical maximum. China is primarily responsible for this increase, where expanding domestic coal production remains part of energy security strategy. At the same time, many countries are announcing plans to gradually phase out coal from their energy balance, causing demand to grow significantly slower than production.

In Russia, coal still occupies a significant share in electricity generation and exports. Production by Russian companies remains close to record levels, and under sanctions, the coal industry is actively redirecting to Asian markets. The state supports exporters by developing port infrastructure in the Far East and subsidizing rail transportation to increase supplies to the Asia-Pacific region. In the future, despite the continued significant role of coal, the industry will need modernization and increased environmental sustainability—given the global trend towards reducing carbon emissions. In the medium to long term, coal companies will face increasing challenges in the context of the "green" transition, although in the coming years, coal will remain in demand for providing base energy supply in several countries.

Renewable Energy: Accelerated Growth of Capacity and Environmental Impact

Renewable energy sources (RES) continue to gain traction both globally and in Russia. According to the Renewable Energy Development Association (AVRE), over the past year, domestic solar and wind power plants have prevented the emission of about 8 million tons of CO₂. Although the share of RES generation in Russia's energy balance remains small (only a few percent), it is growing rapidly. In 2025 alone, new wind farms and solar stations are coming into operation—especially many projects implemented in the southern regions and the Far East. Pilot initiatives for the use of small hydropower and biofuels are also being launched.

Global trends demonstrate record growth rates in "green" energy. China remains the largest investor in this area: in the first five months of 2025, around 46 GW of new wind capacity and about 200 GW of solar power were installed in China—an unprecedented scale. As a result, more than 90% of all new energy capacity introduced in China this year is derived from clean sources. However, to ensure base load, China continues to build modern coal-fired power plants, although the share of coal in total generation is gradually decreasing. In Western countries, renewable energy has nearly displaced coal: the intermittent nature of solar and wind generation is compensated by gas power plants and energy storage systems. All of this signals a global turning point in energy. Investments are increasingly shifting towards RES, and carbon-intensive industries are forced to adapt to new realities. For energy sector investors, the "green" trend opens opportunities—from the development of solar and wind projects to upgrading grid infrastructure and energy storage systems.

Electricity Sector: Decline in Generation and Increase in Tariffs

The electricity sector in Russia has recorded a slight decline in total electricity production in the first half of 2025 compared to the same period last year. According to Rosstat, the total generation over six months was about 600 billion kWh, which is 1.9% less than a year earlier. The main reason for the drop is the low water year, which significantly reduced hydropower generation.

• HPPs: ~98 billion kWh (−12% compared to the first half of 2024).
• TPPs: ~394 billion kWh (+0.5%).
• NPPs: ~104 billion kWh (−0.3%).

Thus, the share of thermal and nuclear energy in the generation structure has increased, while the contribution of hydropower plants has decreased due to natural conditions.

Another important event for the industry was the change in electricity tariffs. From July 1, 2025, a scheduled price indexing has been implemented for households and businesses: electricity and utility tariffs have been increased by an average of 11–12% nationwide. This annual increase, as stipulated by the government, is aimed at helping energy companies compensate for inflationary costs and invest in infrastructure maintenance. However, the rise in payments increases the burden on industry and households. In response, authorities announced support measures: targeted subsidies will be introduced for low-income citizens to alleviate the impact of tariff increases. Regulators also noted that the pace of tariff growth will slow in the coming years (for example, around +9% in July 2026). For electricity investors, the rise in tariffs means potential revenue growth for energy supply and generating companies, although the state is carefully monitoring to ensure that tariff policy does not exacerbate overall inflation and hinder economic growth.

Geopolitics and Energy Resource Trade: Restructuring Global Flows

Geopolitical factors continue to significantly influence global energy resource trade, initiating the redistribution of oil, gas, and coal flows between regions. A notable event is the sharp reduction in energy trade between the U.S. and China amid escalating relations. In June 2025, China did not purchase any oil, LNG, or coal from the U.S. for the first time in nearly three years (according to Bloomberg). Experts associate this with increased trade tensions and Beijing's desire to diversify supply sources. China is increasing oil imports from Middle Eastern and African countries, as well as boosting purchases of Russian crude, taking advantage of pricing discounts on Urals oil. A similar picture is seen with natural gas: significant volumes of LNG are being delivered to China from Qatar, Australia, and the spot market, bypassing U.S. gas.

Meanwhile, Europe continues its course to reduce dependence on Russian energy resources. Imports of Russian oil and oil products to the EU have effectively ceased due to the ongoing embargo, and pipeline gas supplies have been reduced to minimal levels. The European Union is actively developing infrastructure for receiving LNG (new terminals are being built, and long-term contracts with alternative suppliers are being negotiated) to replace the volumes that have been lost. However, completely abandoning Russian gas in the short term is challenging for Europe: some countries, such as Hungary, continue to rely heavily on Gazprom's gas due to previously signed contracts. Political disagreements within the EU are manifested in statements by leaders of these states—for instance, Hungary has indicated that, in the event of a EU-wide ban on Russian gas, it will seek its own solutions directly with Moscow. Such signals underscore the limitations of the bloc's unified stance on energy security.

Overall, there is a transformation of global energy trade under the influence of sanctions, trade disputes, and strategic decisions made by countries. Although the current pricing environment for oil, gas, and coal is largely dictated by fundamental supply and demand factors, political decisions can quickly alter the availability of certain energy resources for entire regions. The energy sectors are entering the second half of 2025 in a state of relative balance but with clear signals of upcoming changes:

• Oil Market: remains relatively stable due to producer coordination, yet it is sensitive to economic risks.
• European Gas Market: approaches winter with record stocks, decreasing fears of sharp price spikes.
• Russian Fuel Market: is increasingly regulated by the state; such "manual" measures will likely become a norm in the near future to prevent crises.
• Global Energy Transition: renewable energy is breaking records in growth while the coal industry reaches peaks before an anticipated decline.

For investors and companies, this means the need to adapt to new realities: to respond flexibly to market changes and seek opportunities in rapidly growing segments while remaining vigilant amid a combination of market and geopolitical factors.