Oil Market: Brent Returns Above $85 per Barrel
Oil prices are starting the week with a confident upward trend. On Monday, the October Brent futures on the ICE exchange climbed above $85 per barrel (+3.2% during the session), while American WTI traded around $79.5–79.8, and Russian Urals was around $79. The driver of this increase has been the heightened uncertainty regarding the reopening of the Strait of Hormuz: the market, which just a week ago had anticipated a swift de-escalation and a decrease in prices, is now forced to reintegrate the "geopolitical premium" into the quotes.
Key pricing factors in the oil market currently are:
- Hormuz Factor: Typically, about one-fifth of global oil supplies and significant volumes of liquefied natural gas (LNG) transit through the strait. The partial blockade, in effect since late February, remains the main source of volatility.
- OPEC+ Supply: The alliance will conclude the return of voluntary cuts in September, adding another 188,000 barrels per day to the market.
- Macroeconomics: Weak employment data in the U.S. has intensified expectations of a dovish Federal Reserve, supporting commodity assets while simultaneously signaling risks for fuel demand.
Analysts note that in the event of a full-fledged deal regarding the strait, Brent could quickly adjust to a range of $70–75, whereas a failure in negotiations might push prices back to spring highs above $90.
Strait of Hormuz: Deal Close, but Tehran Raises Stakes
The diplomatic process surrounding the world’s main oil artery has entered a decisive phase. Iran and Oman have agreed on a unified corridor for ship movements and, according to statements from the Iranian Foreign Ministry, are at the final stage of establishing a joint maritime management mechanism. Washington, for its part, is prepared to lift the blockade on Iranian ports upon reaching an agreement, with the U.S. President previously canceling military strikes in favor of resolving the situation.
However, over the past weekend, Tehran sharply hardened its position, linking the opening of the strait to the fulfillment of several demands:
- Lifting of sanctions against the Iranian economy;
- Payment of compensation for damages caused 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 influence freight rates, insurance premiums, shipping routes for Middle Eastern oil and LNG to Asia and Europe, as well as the price trajectory for energy resources through year-end.
OPEC+: Final Step in 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 previous three months. With this decision, the alliance is effectively concluding the reversal of voluntary cuts amounting to 1.65 million barrels per day that have been in effect since 2023. After September, any further increase in production is planned to be paused until the end of 2026; restrictions of approximately 2 million barrels per day from 2022 will remain in place. The next ministerial meeting is scheduled for September 6. This indicates that the OPEC+ supply factor will become predictable for the coming months, 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 the Gas Infrastructure Europe association, the gas storage capacity in the EU is around 58.8% — the lowest level for early August in 15 years of monitoring, and 16.5 percentage points below the five-year average. Approximately 62–64 billion cubic meters of gas are stored — almost 14 billion cubic meters less than a year ago.
The reasons for this deficit include:
- Abnormal Heat: In July, Europe, for the first time in four years, withdrew about 1 billion cubic meters of gas from storage for cooling and electricity generation — a record summer withdrawal since 2022;
- Decline in LNG Imports: August deliveries of liquefied gas are estimated at about 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 are holding near multi-month highs (around $690 per thousand cubic meters), making replenishment economically painful.
The EU has already reduced its target for storage filling by the start of the heating season from 90% to 80%; however, to reach even this target, the pace of refill must increase significantly. Europe’s gas balance in the winter of 2026–2027 will critically depend on the weather, competition with Asia for LNG, and the situation in the Strait of Hormuz, through which Qatari liquefied gas is transported.
Russian Oil Products 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 — the restriction applies to both producers and traders. The ban on diesel fuel exports is in effect until August 31, 2026, but from September 1, diesel, marine fuel, and gas oils exported by direct producers will be exempt from restrictions.
Measures to stabilize the fuel market include:
- Prioritizing the saturation of the domestic market amid unplanned refinery outages following drone attacks and repairs;
- A temporary order for guaranteed gasoline and diesel supply to agricultural producers during the harvesting season — agreements between the Ministry of Energy, Ministry of Agriculture, regional authorities, and oil companies will be in effect until November 1;
- Tax amendments and a damping mechanism to stimulate processing and retention of fuel within the country;
- Permission to use straight-run gasoline blends for producing high-octane fuel.
For the global market for oil products, the exit of Russian gasoline and a portion of diesel from export channels means a tighter balance and support for crack spreads, particularly in the Mediterranean, Africa, and Latin America.
Asia: India and China Strengthen the Role of Anchor Buyers
Asian consumers remain the main center of attraction for commodity flows. Russian oil exports to India surged in July, aided by price discounts and a restructuring of logistics amid the Middle Eastern crisis. China is ramping up purchases of pipeline gas while continuing to balance between imports and domestic production, increasing its hydrocarbon output. The slowdown in inflation in China as oil shock subsides indicates the 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 crucial intrigue for the upcoming winter.
Electric Power: AI and Data Centers Reshape Demand
A structural theme in global energy remains the explosive growth of energy consumption by data centers. Artificial intelligence is transforming electricity into a strategic resource: energy companies in the U.S. and Asia are launching new gas plants and extending the life of coal units to meet base load demands from data centers. In Russia, plans are being developed to site data centers in energy surplus regions with gas, coal, and nuclear 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 system providers.
Renewables and Energy Transition: Growth Continues, but Balance Becomes Complex
Renewable energy maintains a high pace of capacity installation: solar and wind generation are breaking records in China, Europe, and the U.S., while Central Asia sees more than 20% year-on-year growth in renewable energy output. At the same time, energy systems are increasingly feeling the need for flexible capacity and storage: the hot summer of 2026 demonstrated that peak demand for cooling and data center needs cannot yet be met without traditional generation. The investment focus is shifting from simply 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 sides: stable demand in Asia and a new factor — energy supply for data centers. Russian coal shipments to the east have reached record levels — over 10 million tons per month, reflecting a pivot in exports towards Asia-Pacific markets. In India and Southeast Asia, coal generation remains the backbone of the energy balance, while high gas prices in Europe sustain coal's competitiveness in the global electricity sector, despite climate agendas.
Forecast: What Market Participants Should Watch on August 11
Key benchmarks for investors and energy companies on this day include:
- Negotiations over the Strait of Hormuz — any statements from Tehran, Muscat, and Washington will be immediately reflected in Brent, WTI quotes, and freight rates;
- Gas injection dynamics into European storage and prices at the TTF hub — indicators of the region's readiness for winter;
- U.S. oil inventory statistics and signals from the Federal Reserve regarding rate trajectories;
- The situation in the Russian fuel market — exchange prices for gasoline and diesel amid the export ban;
- Corporate news from energy companies related to projects under AI infrastructure.
The baseline scenario for the upcoming sessions is the maintenance of Brent within the corridor of $80–87 per barrel amid increased volatility: the oil, gas, and electricity markets continue to operate in the rhythm of diplomacy surrounding the Persian Gulf and preparations for an unconventional winter in the Northern Hemisphere.
