Key Developments in the Energy Sector by Friday Morning
- Oil: Brent is trading around $88–90 per barrel, while WTI is in the $83–85 range; weekly growth exceeds 6%.
- IEA: The August report lowers the forecast for global oil supply in 2026 to 102 million b/d (−4.3 million b/d year-on-year), with a Q3 deficit of 1.8 million b/d.
- OPEC+: Final quota increase for September approved (+188 thousand b/d); the alliance is preparing for a pause until the end of the year.
- Gas: EU storage is only ~55–58% full — approximately 22 percentage points below the five-year average; TTF is nearly twice as expensive as at the beginning of the year.
- Russia: The ban on gasoline exports has been extended until January 31, 2027, while diesel restrictions remain in effect until the end of August.
Oil Market: Brent at $90 — Geopolitical Risk Premium Remains High
Oil prices are finishing the week near two-month highs. The North Sea benchmark, Brent, has held within a corridor of $87–90 per barrel, with American WTI around $83–85. Over the past month, Brent has increased by approximately 4–14% depending on the contract, and the annual growth exceeds 30%. Volatility remains extreme: in July, prices fluctuated within a range of about $40 per barrel, reacting to every signal from diplomatic channels. The forward curve is in deep backwardation — contracts for 2027 are trading at $8–10 below the nearest ones, reflecting expectations for gradual normalization of supply following de-escalation. Global oil stocks have fallen below 7.9 billion barrels — the lowest since spring 2025; the cumulative reduction in reserves since the onset of the conflict has reached 410 million barrels.
IEA Report: Supply is Declining Faster than Demand
The IEA's August report, published on Wednesday, served as the week’s major fundamental benchmark. The agency has once again downgraded its estimates: global oil supply in 2026 is projected to decrease by 4.3 million b/d to 102 million b/d, as increases in production from the Americas (+1.4 million b/d) only partially offset losses from the Middle East and Russia. Production in Gulf Cooperation Council countries rebounded to 23.9 million b/d in July but remains 8.3 million b/d below pre-war levels. Demand is also under pressure: due to high fuel prices and disrupted logistics chains, global consumption in 2026 is expected to decline by 1.6 million b/d — most significantly in Asia and the Middle East. However, the agency sees a "bottoming out": Q4 demand is expected to return to growth, and in 2027, assuming de-escalation, supply could jump by 8.3 million b/d to 110.3 million b/d, leading the market into a surplus.
OPEC+: Cycle of Quota Increases Concluded, Pause Ahead
The OPEC+ alliance approved the final quota increase on August 2 — an increase of 188 thousand b/d effective September. With this step, seven key members (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman) have completed the phased unwinding of voluntary cuts totaling 1.65 million b/d agreed upon in 2023. Formally, Russia's quota for September will amount to 9.949 million b/d, while Saudi Arabia's will be 10.478 million b/d. However, due to military risks and logistical constraints, these increases are largely "paper" adjustments: actual production in several countries remains significantly below permitted levels. Delegates indicate that the alliance plans a pause in Q4 — quotas are likely to remain frozen until discussions begin regarding parameters for the 2027 deal. The internal stability of the group remains in question: earlier this spring, the UAE exited OPEC and OPEC+, and Iraq is openly seeking to increase its individual quota.
Geopolitics: The Strait of Hormuz — A Major Risk for Global Energy
The US-Iran negotiation track remains stalled. A ceasefire memorandum signed in mid-June effectively fell apart within a month: tanker attacks in the Strait of Hormuz have resumed, and the conflict has spilled into the Red Sea, where Houthis are attacking vessels near the Bab-el-Mandeb Strait. Washington is intensifying economic pressure on Tehran, including expanding sanctions and a naval blockade of Iranian oil exports. For the global market, this means the "risk premium" in oil and LNG prices will persist: under normal conditions, about one fifth of global oil supplies and a significant portion of Qatari LNG passes through the Strait of Hormuz. Any progress in negotiations could quickly remove $10–15 from the price per barrel — conversely, renewed escalation threatens a return to spring highs, when Brent prices approached $120.
Gas Market: Europe Enters Winter with Inventory Shortfalls
The European gas market remains tense. EU underground storage is only 55–58% full — marking the lowest seasonal levels in history and approximately 22 percentage points below the five-year average. The target filling level set for November 1 was reduced from 90% to 80%, but even achieving this is in doubt: injection rates are lagging behind schedule, LNG imports are 20–25% lower than seasonal norms, and Qatari cargoes via Hormuz are recovering very cautiously. An additional blow comes from the extension of the emergency shutdown at Norway’s Ormen Lange field until February 2027, which extracts more than 1 billion cubic meters from the winter balance. TTF prices fluctuate between €55–62 per MWh, remaining roughly double the levels at the start of the year. Analysts warn: if injection does not accelerate, the market will start pricing in a winter deficit as early as September — a scenario reminiscent of 2021.
Electricity and Renewables: AI Data Centers Reshape Energy Balance
In global electricity markets, the main structural driver remains demand from artificial intelligence. Data center consumption in the US has surged from 23 GW in 2023 to around 42 GW in 2026, and by 2030, they could account for over 10% of all US electricity. This is changing the investment logic of the sector:
- Hyperscalers are signing long-term contracts for nuclear generation — from the revival of power units to agreements for thousands of megawatts of "carbon-free" capacity;
- New solar and wind capacity continues to break records, but load growth is already catching up with renewable energy installation rates;
- Network capacity shortages and extended connection times are delaying the launch of new sites by 1.5–2 years and stimulating the development of microgrids, storage solutions, and self-generation.
For investors, this signifies a multi-year capital investment cycle in generation of all types, networks, and energy storage systems.
Coal: An Unexpected Beneficiary of Energy Deficits
The coal sector is experiencing a renaissance that few predicted just a few years ago. According to US federal statistics, coal generation in the country jumped by 13% last year — rising demand from data centers and air conditioning during hot seasons forced energy companies to bring back plants that were preparing to close. In Asia, coal remains a backbone of energy systems: China and India are maintaining consumption near record levels, while expensive LNG further enhances the competitiveness of coal-fired power plants. Prices for thermal coal remain relatively stable amid persistently high demand, and in the coming years, coal generation is expected to retain a significant share in the global energy balance, despite decarbonization goals.
Russia: Export Restrictions and Stabilization of the Fuel Market
The internal market for petroleum products in Russia remains under manual control. The government has extended the complete ban on gasoline exports until January 31, 2027 — applicable to both producers and traders; restrictions on diesel fuel exports remain in place until the end of August, and according to Deputy Prime Minister Alexander Novak, these will be lifted as balance is restored. The rationale for these strict measures is the reduction in fuel output following drone attacks on refineries and heightened seasonal demand. Wholesale and retail prices for gasoline continue to rise, and market participants do not expect a noticeable correction before Q4. In the export segment, Russia maintains its position as the largest oil supplier to India and China, although actual production — at about 9 million b/d — remains below the OPEC+ quota due to infrastructure constraints.
What Investors Should Watch: Calendar and Scenarios
Key benchmarks for participants in the energy sector over the coming weeks:
- US-Iran Diplomacy: Any signals regarding the resumption of negotiations over the Strait of Hormuz will be a primary price-driving factor for oil and LNG;
- OPEC+ Meeting in Early September: Confirmation of a pause in quota increases and the first outlines of the 2027 deal;
- Gas Injection Rates in European Storage: Lagging behind the target of 80% by November poses the risk of an early "winter" rally on TTF;
- Global Oil Inventory Dynamics: Continued drawdowns will support backwardation and prices above $85;
- Russian Fuel Market: Timelines for lifting diesel restrictions and stabilization of gasoline prices.
The baseline scenario for autumn suggests sustained high prices for oil and gas amid high volatility: the market will balance between record deficits in physical deliveries and the prospect of a sharp surplus in 2027 if de-escalation occurs in the Middle East. For the energy sector, this period carries elevated risks — and simultaneously, historically high premiums for effective risk management.
