Detailed Overview of the Fuel and Energy Sector News as of September 7, 2025: Intensifying Sanction Pressure from the US and Ukraine on the Energy Market, Continued Low Oil Prices Ahead of OPEC+ Meeting, Europe’s Lag in Filling Gas Storage, Extension of Fuel Export Restrictions in Russia, Deepening Cooperation in Eurasia, and Growth in Investments in Renewable Energy
Sunday, September 7, brings new developments in the fuel and energy sector (FES). The United States has intensified its sanctions pressure: Washington has imposed 50% tariffs on certain goods from India, aiming to compel New Delhi to reduce imports of Russian oil, while President Donald Trump has urged European leaders to completely halt purchases of Russian energy resources. Simultaneously, Ukraine has stated that it will not allow the transit of oil and gas through its territory if the raw materials have Russian origins, putting traditional supplies to Central Europe at risk. Against this backdrop, global oil prices remain under pressure, hovering around multi-month lows, as investors anticipate the outcome of the OPEC+ ministers’ meeting on September 7, where potential changes to production quotas will be discussed. In contrast, the European gas market is facing alarming signals: gas storage levels in the European Union trail last year's figures, raising concerns about meeting winter demand. In Russia, authorities have extended restrictions on the export of gasoline and diesel while simultaneously preparing tax mechanisms to stabilize the domestic fuel market following the summer price surge. Meanwhile, Eurasian countries are increasing energy cooperation by redirecting raw material flows through new routes and supporting mutual supplies. Alongside traditional hydrocarbons, the trend of rising investments in renewable energy sources and innovative technologies continues, aiming to ensure the long-term sustainability of the sector.
Global Oil Market: Falling Prices and Expectations for OPEC+ Decisions
The global oil market at the beginning of September maintains a “bearish” trend. The price of the benchmark Brent oil has dropped to around $66 per barrel, and American WTI is trading at about $63 – close to the lowest levels seen in recent years. Current quotations are approximately 15% lower than last year's levels, reflecting an oversupply and a slowdown in demand compared to the peak period of the energy crisis. The primary factor exerting pressure is the ongoing increase in production by OPEC+ countries. According to a previously approved plan, since September 1, the alliance's total quota has been increased by an additional 0.55 million barrels per day, bringing the total increase since spring to around 2.2 million barrels. In effect, this nullifies previous voluntary restrictions and returns significant volumes of oil to the market. Simultaneously, global demand growth has noticeably slowed: OPEC experts forecast an increase in consumption of only ~1.3 million barrels per day in 2025 (compared to ~2.5 million the previous year), while the International Energy Agency estimates an increase of less than 1 million barrels per day due to the overall economic slowdown. As a result, the market is forming a surplus of supply, and oil prices are maintained at a low and volatile level.
Geopolitical factors are also influencing trader sentiment. Under sanctions against Russia, Washington is attempting to cut shadow sales channels for Russian oil: tariffs for India and calls to halt purchases are aimed at reducing Moscow’s revenues. Additionally, Kyiv has announced intentions to block the transit of Russian oil through Ukrainian territory, which threatens supplies to Slovakia and Hungary via the Druzhba pipeline. Slovakia is almost entirely dependent on deliveries via this pipeline, receiving up to 90-100% of oil imports from Russia in recent years. The cessation of pumping threatens significant economic losses for the country and an enforced switch to more expensive imports of petroleum products from neighboring states.
Expert Commentary: “The leadership of Slovakia will exert maximum diplomatic efforts to ensure stable oil supplies from Russia: there is no politics in this; it is a matter of economic feasibility,” noted Sergey Tereshkin in a comment to RIA Novosti (PRIME).
Despite the intensification of sanctions pressure, the market has not experienced panic, largely due to the preemptive actions of Saudi Arabia and its partners. Additional supplies from OPEC+ participants are compensating for potential shortfalls, mitigating the risk of shortages. As a result, oil prices remain relatively low, forcing producers to optimize costs to maintain profitability. Several analysts caution that if current trends continue, by 2026, the average Brent price could fall to $50 per barrel. Nevertheless, the uncertainty factor remains high: any unexpected agreements between major powers or, conversely, new conflicts could sharply alter price dynamics.
Gas Industry: Storage Challenges in Europe Ahead of Winter
The gas market is focused on the situation in Europe as the heating season approaches. Contrary to the favorable situation a year ago, European countries risk not meeting gas injection targets this year. According to Gas Infrastructure Europe, by the end of August, underground gas storage facilities in the EU were only about 76% full, while last year this figure exceeded 90%. Thus, during the summer months, only about two-thirds of the volume of gas consumed last winter could be compensated, resulting in a replenishment shortfall of nearly 19 billion cubic meters – one of the worst figures in history.
Alexey Miller, head of Gazprom, warned that preparations for winter are effectively disrupted if the current injection rates persist. Major economies in the EU are exhibiting significant lag: for instance, German storage facilities are only 71% full, while Dutch facilities are at 65% against a target level of 90%. The situation is even more alarming in the Baltics: the only storage facility in the region, the Inčukalns UGS in Latvia, is filled to about half its capacity. Time is running out to rectify this situation – gas withdrawals from storage usually commence in October.
Nevertheless, the European Union is taking measures to mitigate the risks of shortages. Liquefied natural gas (LNG) purchases from alternative sources have been increased to compensate for the temporary reduction in supplies from Norwegian fields due to summer maintenance. According to estimates from the European Commission, the record introduction of new renewable energy capacity (up to 89 GW of solar and wind power plants in 2025) indirectly also restrains gas demand, allowing fuel savings. Meanwhile, the political line on abandoning Russian energy resources is becoming increasingly stringent: Russia's share in the EU's imported gas balance has already dropped from ~45% to less than 20%, and by the end of 2025, it is planned to reduce it to 13%. In Brussels, discussions are even underway to accelerate a complete embargo – potentially moving the deadline from 2028 to 2027, as well as closing any remaining loopholes allowing Russian gas into Europe.
The situation in Ukraine deserves separate mention. By refusing direct purchases of Russian gas, Kyiv has become highly dependent on reverse supplies from the EU and imported electricity from neighboring countries. At the same time, its own gas reserves at the beginning of autumn are the lowest in a decade, forcing the Ukrainian government to urgently seek additional fuel volumes for the winter. Thus, although the European gas market as a whole is striving for stability by diversifying sources, individual countries in the region may face acute shortages in the event of severe cold spells.
Russian Fuel Market: Stabilization After the Summer Crisis
In the domestic market for petroleum products in Russia, a gradual improvement is noted at the end of summer after the acute fuel crisis in August. Just in mid-last month, wholesale prices for gasoline hit historical records: at the St. Petersburg exchange, the price of AI-95 gasoline reached 80,000 rubles per ton, nearly 50% higher than a year ago. In some regions, fuel shortages emerged – independent gas stations introduced sales restrictions, and retail gasoline prices in some areas exceeded 65 rubles per liter. The reasons for the crisis were multifaceted. First, seasonal demand growth (summer transportation and harvesting campaigns) coincided with planned maintenance at refineries, leading to production declines during peak consumption. Second, unplanned situations dealt a second blow: in July-August, several major oil depots and refineries temporarily halted operations due to accidents and drone attacks, reducing fuel output. Third, the damping mechanism lost effectiveness – subsidies to oil companies from the budget decreased, leading producers to compensate for lost revenues by raising exchange prices, particularly for high-octane gasoline, which is weakly regulated by the state. Lastly, logistical issues exacerbated imbalances in remote areas: a lack of local reservoirs and increased transportation costs led to particularly high prices in the Far East and some southern regions.
The Russian government intervened promptly to alleviate market tension. Since August 21, a temporary ban on the export of automotive gasoline and diesel has been imposed for all oil companies – initially until August 31, but the restrictions have since been officially extended. Major producers are prohibited from exporting gasoline at least until September 30, while independent traders and oil depots face restrictions until October 31, 2025. These measures aim to saturate the domestic fuel market and prevent further price increases. Simultaneously, the authorities are preparing to adjust the tax-subsidy policy: an update of the damping mechanism is expected in the fall to increase compensations for refiners during high price periods. It has been proposed to raise the allowable deviation of exchange prices from the baseline when calculating subsidies: for AI-92 gasoline – from 10% to 15%, for diesel fuel – from 20% to 25%. This will allow plants to receive budget payments even at current high prices and reduce incentives to inflate fuel costs on exchanges.
Thanks to the measures taken and seasonal factors, the situation began stabilizing by early September. Major oil companies, following government directives, increased fuel supplies to troubled regions – tankers are rapidly delivering gasoline and diesel to the Far East, Primorye, and Crimea, helping to eliminate shortages. Preventive maintenance at several key refineries is concluding, and with the end of the vacation season, fuel demand is naturally declining. Experts expect that by September, the domestic market will transition from a supply deficit to surplus, allowing prices to gradually retreat from peak levels. Early signs of this trend are already visible in the exchange: wholesale gasoline prices have halted their rise and are beginning to reverse, signaling market saturation.
Russian Oil: Export Realignment and Record Refining
Russia's oil sector continues to successfully adapt to new conditions. Despite sanctions and embargoes, the export of crude oil remains close to pre-crisis levels. In the first half of 2025, the average daily export amounted to about 4.3 million barrels per day – only slightly lower than in 2024. The lost European buyers have been nearly entirely replaced by Asian countries: China and India now cumulatively purchase about 80% of Russia's crude oil export volume (up from less than 50% in 2022). This indicates a massive realignment of flows and the formation of a new stable sales geography, where friendly countries in Asia and the Middle East play a key role.
At the same time, the pricing environment for Russian energy resources remains challenging. Due to the overall cheapness of oil in the global market and a persistent ~$10 discount for Urals relative to Brent, Russian budget revenues from oil and gas are declining for the second consecutive year. Analysts estimate that in 2025, total oil and gas revenues could be a quarter lower than the previous year. However, many industry participants believe that the bottom has already been reached. The depreciation of the ruble and the relative stabilization of markets in the second half of the year have stabilized export revenues. As a result, month-on-month oil and gas revenues have been maintained at July levels, and forecasts suggest they will remain within these limits until year-end. In 2026, a partial recovery is expected: due to a potential reduction in the price discount for Urals and an increase in physical export volumes, the federal budget may receive 15-20% more oil and gas revenues than in 2025.
Concurrently, domestic refineries have reached record processing volumes. In August, following the completion of scheduled maintenance, the output of petroleum products sharply increased. The rise in the depth of processing has allowed the redirection of excess fuel oil volumes to foreign markets: in the first three weeks of August, export of fuel oil from Russia reached about 1.1 million barrels per day, which is 200,000 barrels more than in July, nearing recent historical highs. The main buyers of Russian fuel oil are China, India, and Saudi Arabia, which actively utilize this heavy fuel for electricity generation. Thus, domestic companies are compensating for the introduced ban on gasoline exports by increasing supplies of other fuel types, maintaining their presence in international markets and optimizing their capacities.
In the medium term, the Russian oil industry aims to maintain high stable production levels, relying on new projects in Eastern Siberia and the Far East. These initiatives should help preserve Russia's share in the global market and influx of foreign currency revenues, even if sanctions remain in place for a long time. Key success factors include:
- development of oil transport and export infrastructure,
- import substitution of equipment and technologies for fields and refineries,
- expansion of settlements in national currencies with buyer countries.
The latter reduces the sector's dependence on external financial pressures. The implementation of these measures is aimed at ensuring the resilience of the Russian fuel and energy sector and maintaining competitiveness even amid sanctions.
Regional Trends: Cooperation in the Eurasian Space
Significant changes in energy logistics are occurring in the post-Soviet and Eurasian space. Russia’s closest partners in the Eurasian Economic Union (EAEU) are adapting to the new environment and strengthening cooperation with the Russian Federation. This summer, Kazakhstan has focused on Russian oil export routes. In August, Kazakh authorities temporarily redirected all exported crude oil volumes through Russian territory – via the CPC pipeline to the port of Novorossiysk. Previously, a significant portion of the supplies was routed through the alternative Azerbaijani route Baku-Tbilisi-Ceyhan; however, technical issues (contamination of a batch of oil) necessitated limiting throughput in the southern direction for several months. In this context, Russian infrastructure once again confirmed its reliability: transit via the CPC allowed Astana to export oil uninterrupted while repairs were made on the other route. Experts note that transporting via Russia is often more economical and quicker, and emergency circumstances have only underscored this fact.
Besides oil, cooperation is deepening in other segments of the energy sector. Specifically, Russia and Azerbaijan discussed energy system synchronization and mutual electricity supplies for covering peak loads and emergency situations in August. Trade in petroleum products is also increasing with Central Asian countries: regional states such as Kazakhstan and Tajikistan are enhancing imports of Russian gasoline and diesel to stabilize their domestic markets. Thus, regional integration in the fuel and energy sector is strengthening, helping all participants to more effectively address emerging challenges – from fuel shortages to infrastructure constraints – and form a more resilient energy system in Eurasia.
Energy and Renewable Energy: Emphasis on Sustainable Development
Despite market turbulence in hydrocarbon sectors, the long-term course towards energy transition remains unchanged. New records are being set globally for generation from renewable energy sources (RES) – including solar, wind, and hydro resources. In several countries, the share of "green" electricity has already surpassed 30%, and even traditional leaders in oil and gas extraction are actively investing in solar and wind projects. According to the International Energy Agency, by 2025-2026, generation based on RES could surpass coal and become the largest source of electricity in the world, underscoring the acceleration of the global energy transition.
In China, during the first six months of 2025, the total output of wind and solar energy reportedly exceeded electricity generation from coal-fired plants on certain days for the first time. This vividly illustrates the rapid growth of RES, even in a country with a traditionally high hydrocarbon balance. In Europe, the European Commission anticipates a record introduction of ~89 GW of new RES capacity in 2025 (including about 70 GW of solar and 19 GW of wind energy), marking the largest annual expansion of green generation in the history of the EU.
In Russia, the development of renewable energy is progressing more gradually but steadily. The total installed capacity of RES generation in the country exceeded 6.6 GW (as of July 1, 2025), increasing by approximately 7% over the year. The government aims to accelerate the commissioning of new facilities: by 2030, the total capacity of solar and wind power plants is planned to reach ~15 GW. Simultaneously, initiatives are being pursued to enhance the resilience of the energy system amid a growing share of variable generation. By the end of this year, the Ministry of Energy promises to launch pilot industrial energy storage systems in the southern part of the country to smooth load peaks and facilitate the integration of RES. Additionally, projects for the wide implementation of hydrogen energy and small modular nuclear reactors for supplying remote regions are being advanced.
- Launch of experimental energy storage systems by the end of the year to balance network loads.
- Projects for the joint combustion of hydrogen at power plants and the development of hydrogen infrastructure.
- Development and application of small modular nuclear reactors to supply energy to hard-to-reach areas.
All these measures aim to ensure that the national fuel and energy sector remains competitive and resilient to external challenges in the long term. The gradual diversification of the energy balance and the implementation of innovations allow the industry to contribute to global climate goals while maintaining the country's energy security.
