Energy Sector News – Saturday, August 2, 2025: Brent around $73; Russia restricts gasoline exports to stabilize prices

By the beginning of August, the global fuel and energy sector demonstrates stability and moderate growth. Oil prices remain at a high level: the North Sea Brent mark is holding around $73 per barrel (the highest since late June) amid ongoing geopolitical risks and high seasonal demand. The European gas market feels relative calm due to record injection rates of fuel into underground storage facilities ahead of winter. Concurrently, regulators and market participants are taking steps to maintain balance: as of August 1, the OPEC+ alliance has begun a planned increase in oil production to prevent supply shortages, while the U.S. Federal Reserve's decision to keep interest rates unchanged signals stability in the macroeconomic environment and supports investor optimism. In Russia, an emergency ban on gasoline export continues, aimed at cooling domestic fuel prices during the peak summer demand period. Below is a detailed overview of the key events and trends in the oil, gas, electricity, and other segments of the energy sector as of August 2, 2025.

Oil Market: Brent Holds Near Highs, Demand and Risks Support Prices

Oil prices wrapped up the week at multi-week highs. The North Sea blend Brent is trading close to recent peaks (around $72–73 per barrel, above the psychologically important mark of $72). The American WTI is hovering around $69–70. Price increases are fueled by several factors:

• U.S.-EU trade thaw. The establishment of a framework agreement between Washington and Brussels prevented escalation of a long-standing trade dispute. The parties agreed on mutual tariff reductions and a substantial increase in U.S. energy exports to Europe, improving investor sentiment and enhancing expectations for increased demand for U.S. oil and gas. Furthermore, the U.S. has intensified dialogue with India to eliminate trade barriers, easing global market tensions.
• Geopolitical risks and sanctions uncertainty. U.S. President Donald Trump has intensified rhetoric against 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 buyers of Russian oil if there is no progress. These statements raise uncertainty over future supplies and add a "risk premium" to the price of a barrel. So far, Moscow has shown no willingness to make concessions; Russian officials have called such ultimatums unacceptable, maintaining market tension.
• OPEC+ actions. Oil-producing countries are systematically increasing supply. From August, total production quotas have officially been raised by approximately 548,000 barrels per day (even slightly above the originally planned schedule); similar increases are expected to be confirmed for September as well. Recently, the OPEC+ Joint Monitoring Committee reaffirmed commitment to the deal and readiness to increase production to prevent shortages this fall—these signals temper further price rises.

As a result of all these factors, the oil market remains relatively balanced. Brent has settled in the range of ~$72–73 per barrel: the recent growth momentum is tempered by expectations of increased supplies from OPEC+. Despite rising prices in recent weeks, the current level is still 10-15% lower than the figures from a year ago—this reflects the market's correction after the peaks of the energy crisis of 2022–2023. Investors continue to monitor external signals: negotiations between the U.S. and China are ongoing to resolve trade disputes, and the U.S. Federal Reserve, following its July 30 meeting, kept its rate unchanged. Soft monetary conditions combined with the resolution of trade disputes could support demand for energy resources in the second half of the year.

Gas Market: Record Storage Filling and Relative Price Stability

The European gas market remains in the spotlight. EU countries are accelerating the injection of natural gas into underground storage facilities in preparation for the winter heating season. By the beginning of August, European UGS facilities are over 73% full (compared to ~59% a month earlier), translating to over 75 billion cubic meters of reserves. Although the pace of injection slowed somewhat in July compared to record volumes (12–13 billion cubic meters in June), the EU has managed to significantly reduce the backlog from last year's storage filling schedule. The target to reach at least 90% by the start of the heating season now seems achievable.

Gas prices remain elevated but stable, with low volatility. The basic European price index TTF hovers around $400 per thousand cubic meters, approximately matching the same period last year. Summer heat in Western Europe increases demand on energy systems (massive use of air conditioning), partially raising gas consumption at power plants. Simultaneously, sunny weather ensures record solar energy generation, keeping gas demand in check during peak load hours. Stable deliveries of liquefied natural gas (LNG), 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 onset of cold weather in the fall may again increase volatility. Record-high storage volumes reduce the likelihood of sharp price spikes this winter, which is positively perceived by investors and industrial consumers. Market participants are closely monitoring further steps by the EU to strengthen energy security—including discussions on new storage filling regulations and potential restrictions on Russian gas imports.

Global Agreements and Policy: Trade Thaw vs. Sanction Pressure

The international agenda intertwines two opposing trends: on one hand, the de-escalation of trade conflicts between major economies, and on the other hand, the escalation of geopolitical rhetoric. A key event in recent days was the trade-energy deal between the U.S. and the EU, accompanied by a softening of mutual trade disputes. Washington and Brussels have developed agreements aimed at preventing a new tariff war: mutual understanding has been reached on reducing tariffs and increasing energy supplies from the U.S. to Europe. The energy component of the agreement is beneficial for both sides: the EU receives additional guarantees of stable gas and oil supplies, while the U.S. gains market expansion and capital inflow through increased exports. This positive trade signal has bolstered market confidence in the sustainability of future demand for energy resources.

Concurrently, the U.S. administration continues to ramp up pressure on Moscow. President Trump shortened the deadline for achieving a ceasefire in Ukraine (an ultimatum of approximately 10 days, expiring August 8) and made it clear that he is "not concerned" about any potential negative market reactions to the implementation of new stringent measures against Russia. This involves the potential introduction of maximum tariffs on Russian goods and secondary sanctions against buyers of Russian oil and gas. The prospect of such moves keeps market participants on edge, considering the risks to global energy supply chains. Moscow, for its part, has indicated it does not intend to change its policy in the face of external ultimatums. As a result, parallel processes of trade thaw between major economies and escalating sanction rhetoric are currently unfolding on a global level. The outcome of this confrontation will largely determine the conditions of global oil and gas trade. Investors are closely watching whether the economic benefits of new export agreements will outweigh the potential downsides of sanction limitations, as this will influence the long-term balance of supply and demand in global energy markets.

Electricity and Renewables: Record Consumption and Growth of Green Generation

Abnormal weather this summer is setting new records in the electricity sector and emphasizing the importance of renewable energy sources (RES). In China, unprecedented demand on the energy system was recorded in July: peak electricity consumption reached a historic maximum of about 1.5 TW. This level was driven by extreme heat and massive use of air conditioning. Nevertheless, a significant share of the production increase was achieved thanks to solar power plants, along with increased generation at hydroelectric power stations compared to last year—this helped partially compensate for the demand surge and avoid significant energy supply disruptions.

In the U.S., rapid development of RES is significantly changing the structure of generation. As of mid-2025, the share of wind and solar generation has reached around 24%, surpassing the contribution from coal-fired power plants and nearing the level of nuclear generation (each of these traditional categories now contributes less than 20% to overall production). Together with hydro and other sources, more than 30% of electricity in the U.S. is produced using "green" technologies—this is a record figure. Thus, for the first time, wind and solar energy in the U.S. surpassed coal in importance and is gradually catching up with nuclear power.

For Europe, increasing the share of RES has also become a strategic trend, especially after the recent energy crisis. Back in 2023, some EU countries were compelled to increase electricity generation from coal due to gas shortages, leading to a spike in CO₂ emissions and record electricity price growth. However, by 2025, the situation has stabilized: gas storage facilities are filled, new wind and solar power plants have come online, and the share of coal in the EU energy mix is once again declining. Despite new temperature records (for instance, extreme heat at the end of July caused water overheating at some nuclear power plants, complicating their cooling), the European energy system is withstanding peak loads without major outages. Grid operators are implementing heightened readiness modes on days of extreme heat, while renewable sources are taking on an increasing share of demand coverage. In general, the summer of 2025 demonstrates the resilience of the electricity sector: even under challenging conditions, consumers are provided with electricity, largely due to record generation volumes based on RES.

Coal Sector: High Demand Amid Moderate Prices

Coal continues to play a notable role in the energy mix of many countries, despite the global push towards decarbonization. According to the International Energy Agency, global coal consumption in 2025 will 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 usage in Asia. In countries like India and several Southeast Asian states, electricity generation from coal continues to grow to meet rapidly rising demand.

The largest consumer of coal, China, is likely to maintain combustion volumes at levels similar to last year or decrease them slightly in 2025 (a decrease of less than 1% is expected compared to 2024). Meanwhile, European countries, having filled gas storage facilities and launched new RES capacities, are actively reducing reliance on coal generation. Following the spike in coal output during 2022–2023 (when coal temporarily replaced expensive gas), the share of coal in the EU energy system is once again on the decline. Nevertheless, 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 substantial.

In recent months, prices for thermal coal in the global market have demonstrated restrained dynamics. Futures for API2 coal (a benchmark for Europe) are trading in the range of $110–120 per ton (Rotterdam port, end of July). This is slightly higher than levels at the beginning of summer (prices rose by ~5–7% over the month), but significantly below prices from a year ago (in the summer of 2024, coal was 15–20% more expensive). This pricing picture reflects a balance of factors: on one hand, global demand for coal remains high (especially during heat waves when coal is used to cover peak loads); on the other hand, market supply is adequate, and consumers have built substantial stocks. Major exporters—such as Australia, Indonesia, Russia, and South Africa—maintain stable supply volumes. In developed countries, the trend towards reducing coal generation continues: environmental regulations and tax policies make new coal projects less attractive. However, in Asia, as noted, some countries are temporarily ramping up coal combustion to avoid purchasing expensive gas. As a result, global coal consumption remains plateaued. According to the IEA's forecasts, as the energy transition accelerates and China gradually shifts towards gas and RES, global demand for coal will begin to decline smoothly starting from 2026. For now, the coal sector provides production levels close to record highs worldwide, remaining a crucial component of energy supply.

Oil Products and Refining: Market Contrasts and Stabilization Measures

The oil products market is developing differently across various regions of the world. In Russia, authorities have taken an unprecedented step to stabilize fuel prices. As of August 1, a temporary complete ban on the export of automotive gasoline for all companies, including major producers and refineries, has come into effect until August 31, 2025. This emergency measure aims to prevent fuel shortages in the domestic market and curb the wave of rising gasoline prices during peak summer demand (holiday season and harvesting campaign). Previously, restrictions only applied to traders and small refiners; however, by the end of July, wholesale gasoline prices had reached historical highs, forcing the government to implement strict administrative measures. Now, Russian refineries are directing virtually all gasoline volume to the domestic market. An increase in supply on the exchange is expected to help cool prices, which soared to record levels in June and July. After news of the upcoming embargo emerged in late July, exchange prices indeed stopped rising: by July 25, the price of AI-92 gasoline decreased by about 1.5%, while AI-95 dropped by 1.1%, anticipating the introduction of the ban.

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

“Against the backdrop of falling refinery profitability, exchange prices are likely to remain around current levels regardless of whether the export ban is extended,” — Sergey Tereshkin, Russian Gazette.

Thus, Russia's example illustrates that even one of the largest gasoline exporters is willing to restrict external sales to protect domestic consumers. This underscores the existence of local fuel imbalances in different regions of the world. A contrasting picture is observed in the U.S., where the domestic fuel market is experiencing a period of relative abundance. Thanks to high processing volumes at American refineries and atypically weak summer demand, gasoline prices in the U.S. have fallen to their lowest levels in recent years. The national average gasoline price after Independence Day decreased to ~$3.14 per gallon (about $0.83 per liter)—a record low for the summer season since 2021. Analysts note that in August–September, the national average may drop below the psychological mark of $3/gallon, a feat not achieved since spring 2021.

The reasons for the decline in fuel prices in the U.S. are manifold. Firstly, summer demand was weaker than expected: according to the U.S. Department of Energy, gasoline consumption in early July was 1–2% lower than the previous year. Abnormal heat in the southern U.S. partially reduced long-distance driving; furthermore, the prevalence of remote work and thrift mode lowered driver mileage. Secondly, gasoline supply has increased: American refineries are operating at very high capacity, and fuel imports from Europe and Canada have sharply increased on the East Coast. In June, the U.S. imported about 100,000 barrels of gasoline per day—the highest in over a year. Wholesale bases and storage are filled to the brim, leading to declining wholesale prices that then get passed down to retail. Thirdly, relatively low oil prices in the first half of the year (with WTI prices now approximately 20% lower than a year ago) reduced costs for refiners, allowing them to partially transfer this benefit to end consumers.

Simultaneously with the decline in fuel prices, the situation in U.S. refining has improved. Spring maintenance at refineries has been completed, and gasoline and diesel production is at a seasonally high level. An additional factor is the actions of OPEC+: the upcoming increase in oil production in August will enhance raw material availability and exert downward pressure on global oil prices, indirectly easing further declines in gasoline prices. In other words, the current market conditions for oil products in the U.S. are favorable for consumers: supply exceeds demand, and prices are gradually decreasing without signs of shortages.

In Europe, the situation with motor fuel prices is relatively stable. After the upheavals of 2022–2023, when sanctions and logistics restructuring led to sharp price spikes, the gasoline and diesel markets reached equilibrium in 2025. Wholesale gasoline prices are currently close to levels seen at the beginning of the year and significantly below peaks from last winter. Contributing factors include relatively cheap oil (~$70 per barrel compared to >$100 a year ago) and successful reorientation of oil products import channels: the EU has established stable supplies of diesel fuel from the Middle East, Asia, and the U.S. to replace lost Russian volumes. As the expensive fuel batches purchased by European importers last winter are consumed and replaced with cheaper ones, gas stations in the EU are gradually beginning to lower retail prices. However, due to high taxes and duties, gasoline in Europe remains expensive for end consumers—with prices in the largest EU economies holding in the range of €1.6–1.8 per liter at gas stations.

Overall, the global oil products market is currently not experiencing acute shortages, although regional disparities remain. In some developing countries (such as Pakistan, Bangladesh, and several African states), the high cost of imported fuel creates serious strain—governments are compelled to subsidize gasoline for the population to avoid social discontent. Meanwhile, in the Middle East and India, refineries are hitting records: local refineries focused on diesel and jet fuel exports 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.—pose risks of local supply reductions in the future. However, for now, the summer of 2025 is passing relatively calmly for the oil products market: fuel prices in most regions are either falling or stabilizing, and consumers worldwide are generally supplied with gasoline and diesel without disruptions.

Corporate News: Quarterly Results and Investment Plans

The end of July marked the publication of financial results for the second quarter of 2025 from major oil and gas corporations. The reports from industry leaders reflect normalization of market conditions compared to last year’s record figures. For instance, one of the largest companies, Shell, reported adjusted earnings of approximately $4.3 billion for Q2 2025—this is nearly a third less than a year earlier due to lower oil and gas prices. Nevertheless, the result exceeded analysts' expectations, which was positively received by the market. Other majors followed a similar trajectory: leading oil companies in Europe and the U.S. (including BP, TotalEnergies, ExxonMobil, and Chevron) reported declines in quarterly profits compared to the peak first half of 2024 but overall earned more than forecasted. Despite retreating from last year's record levels, the oil and gas sector continues to generate a solid cash flow. Many companies maintain generous returns for shareholders (dividends, share buybacks), signaling confidence in business stability.

At the same time, the industry has outlined further development paths, adapting to new challenges. A significant portion of additional income is directed towards investments not only in traditional oil and gas extraction projects but also in the transition to "green" energy. Major international players are increasing investments in renewable sources, LNG infrastructure, hydrogen technologies, and carbon footprint reduction. For example, several companies have announced projects for the development of offshore wind power and "green" hydrogen, aligning with long-term decarbonization trends. Concurrently, national oil and gas giants (such as Saudi Aramco, Rosneft, etc.) continue to implement strategic projects for capacity expansion, diversifying sales markets, and localizing equipment. Overall, the quarterly financial results confirm the resilience of the oil and gas sector and its ability to invest in the future, despite moderate profit declines.

Outlook: Factors to Watch

• Monetary Policy. Future decisions by leading central banks (especially the U.S. Federal Reserve and ECB) regarding interest rates and the dollar's exchange rate will impact borrowing costs, investment activity, and consequently, global demand for energy resources.
• Sanctions and Trade Disputes. The development of sanction policy against Russia (including potential new restrictions from the U.S.) and the progress of U.S. trade negotiations with China, India, and other countries will directly affect global oil and gas supply chains, which could influence prices and availability of energy resources.
• Economic Growth and Demand. Macroeconomic indicators in key economies—GDP growth rates and industrial activity in China, the U.S., Europe, and India—will determine consumption dynamics for oil, gas, and electricity. Strong data (e.g., U.S. GDP growth of ~3% in Q2) supports optimism, while economic slowdowns may dampen fuel demand.
• Gas Storage Filling. Europe’s progress towards achieving the 90% filling goal for gas storage facilities before the heating season, alongside securing alternative gas supplies (e.g., through LNG), will define the situation in the gas market this fall and winter. Adequate reserves can mitigate prices, whereas delays in schedules or supply disruptions may return volatility.
• Actions by OPEC+ and Production Levels. The fulfillment of OPEC+ countries' planned oil production increases, as well as potential decisions in upcoming meetings of the alliance, will influence market balance and price dynamics. In addition, production levels in the U.S. and other independent producers (the shale sector) may adjust supply-demand ratios in global oil markets.
• Fuel Market in Russia. The effect of the introduced ban on gasoline exports in August in Russia and subsequent steps by authorities (either lifting or extending the restriction after August 31) will impact both domestic fuel prices and available export volumes from Russia. Investors and traders will evaluate whether retail prices in the country stabilized and whether the restrictions could lead to gasoline shortages or, conversely, surplus in the domestic market.