Key Topics of the Day: What is Shaping the Energy Agenda on 12 August 2026
- Oil: Brent rose above $90 per barrel for the first time since 31 July; WTI traded around $84. The driver is the risk of prolongation of the crisis surrounding the Strait of Hormuz.
- Geopolitics: Washington has presented new demands to Tehran, including compensation for years of damage, complicating the deal on normalising shipping in the Persian Gulf.
- Gas: European gas storage levels are nearly 17 percentage points below the five-year average; injection rates are among the lowest since 2011.
- OPEC+: The alliance raised quotas for August and September by 188,000 barrels per day and is preparing to pause production increases.
- Russia: The embargo on gasoline exports has been extended until 31 January 2027 amid ongoing tensions in the domestic fuel market.
- Macro: Markets are awaiting the release of US inflation data — the CPI report could set the direction for all commodity assets for the rest of the week.
The Oil Market: Brent Above $90 — Risk Premium Returns
The oil prices concluded Tuesday with a sharp increase of more than 2.5%: October futures for Brent rose to $90 per barrel, while September contracts for WTI reached $84.4. The formal trigger was the tough rhetoric from the White House: the US president stated that Iran must compensate for damages inflicted over decades of confrontation and emphasised that US forces control the Strait of Hormuz and have conducted its demining. The market interpreted these statements as a signal that a swift agreement on restoring free shipping will not be forthcoming.
Volatility remains extreme: just last week, Brent fell to $83 on hopes for progress in negotiations, only to add about $7 over two trading sessions. Traders are embedding a significant geopolitical premium in prices, as around 15% of global oil passes through the Strait of Hormuz. An additional note for the market — US imports of Saudi oil have fallen to zero for the first time since 1985: the Middle Eastern crisis has dramatically reshaped global commodity flows. Meanwhile, oil and gas majors are reporting tens of billions of dollars in additional profits for the first half of the year.
The Strait of Hormuz: Bargaining Around the World's Main Oil Corridor
The key narrative for the commodity market in 2026 is the fate of the Strait of Hormuz. Following the de facto closure of the corridor, Tehran is showing a willingness to discuss the resumption of transit, but on its own terms:
- Iran seeks to impose a fee of 5–7% on the value of cargoes from vessels using the strait;
- Oman, aspiring to act as a mediator, is discussing a compromise rate of about 3%;
- The Iranian parliament is considering a bill to ban the passage of American and Israeli vessels;
- The proposed agreement between Iran and Oman for joint control over the strait effectively gives Tehran leverage over all vessels entering the Persian Gulf.
Despite the blockade, Iran continues to increase its oil exports through a "shadow" fleet and complex payment schemes. Analysts warn that the longer the uncertainty persists, the higher the risk that fluctuations in oil prices will exacerbate the financial and macroeconomic vulnerability of the global economy.
OPEC+ Without the UAE: Final Step in Raising Quotas and a Pause Ahead
The oil alliance continues its strategy of cautious supply increases. Seven OPEC+ countries — Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman — have raised quotas for August by 188,000 barrels per day and agreed on a similar step for September, which will mark the final phase of reversing voluntary cuts of 1.65 million barrels per day. From February to August, the cumulative quota grew by approximately 940,000 barrels per day. The alliance intends to pause thereafter: complicated negotiations about quota allocations for 2027 lie ahead, while cuts of around 2 million barrels per day, effective since 2022, remain in place.
Internal contradictions are rising: the United Arab Emirates exited OPEC and OPEC+ on 1 May 2026, while Iraq publicly entertained a similar move, demanding an increase in its individual production limit. Within the August quota framework, Russia could increase production to 9.887 million barrels per day. For investors, the key question is whether the alliance will manage to maintain discipline and unity amid high prices and centrifugal tendencies.
Gas Market: Europe Enters Winter with Minimal Stock Levels
The European gas market is the main source of concern for energy stakeholders ahead of the autumn-winter season. The EU's gas storage levels are only about 59% full — nearly 17 percentage points below the five-year average. Injection rates in July were among the lowest since 2011, impacted by lost competition with Asia for available LNG volumes during the Middle Eastern conflict, high fuel prices, and an abnormal heatwave that increased electricity consumption for cooling. LNG imports in August are expected to be around 6.3 million tonnes — 16% lower than last year.
TTF hub prices are holding in the range of €41–44/MWh (over $500 per thousand cubic meters), with prices rising by about 55% by the end of July. To comply with the European Commission's norm of 90% storage capacity by the start of winter, the region needs to inject at least 68 billion cubic metres net, and meeting this target is in question. A cold winter under the current balance could trigger a new round of price rallies in the global gas market.
Electricity and Renewables: Record Green Share Fails to Alleviate High Electricity Prices
The paradox of the European energy transition is vividly illustrated by Germany: the share of renewable energy in generation reached 71%, up from 65% in 2024, yet the average daily electricity price in August rose to €114/MWh — approximately 40% higher than last summer. The reasons include heatwaves, a reduction in the capacity of French nuclear plants, and expensive gas, which is closing off peak demand. An energy system not underpinned by sufficient storage is increasingly struggling to balance record amounts of solar and wind power.
Meanwhile, the global trend remains unchanged: according to the International Energy Agency’s forecast, by 2026, renewables will surpass coal in global electricity generation. In the first half of the year, renewable sources accounted for 45.5% of generation in the EU, while China continues to deploy record volumes of solar and wind capacity, developing energy storage systems and the market for green certificates.
Coal: Expensive Gas Extends the Life of Traditional Generation
High gas prices are once again boosting coal's competitiveness. The IEA predicts that CO₂ emissions from electricity generation will rise by approximately 1% in 2026, primarily due to increased coal generation, and stabilisation of emissions will only occur from 2027 onwards, thanks to the expansion of renewables and nuclear power. Demand for thermal coal remains robust in Asia: China and India use coal-fired power plants as a buffer during peak consumption periods, while exporters — Indonesia, Australia, Russia, and South Africa — maintain stable supply volumes.
The Russian Fuel Market: Export Ban Until 2027
The domestic market for petroleum products in Russia remains in a mode of manual management. The government has extended the complete ban on gasoline exports until 31 January 2027, applying it to all producers; in July, the export regime for diesel was further tightened. These measures aim to saturate the domestic market after months of fuel tension, yet wholesale and retail prices continue to rise. The base scenario anticipates stabilisation and price increases within the bounds of inflation; the negative scenario suggests persistent local shortages and a price rise of AI-95 to 65–67 roubles per litre. Non-standard solutions are also being discussed, including processing Russian oil at Kazakh refineries with partial return of fuel to the Russian market. Experts do not expect any significant price reductions before the fourth quarter — assuming the uninterrupted operation of major refineries.
What This Means for Investors: Scenarios and Guidelines
The environment promises to be eventful: markets are awaiting consumer inflation data in the US, which will influence expectations regarding the Fed's interest rate and, consequently, the entire commodity complex. For participants in the energy sector, the key points of reference for the coming weeks appear as follows:
- oil: the range of $83–95 per barrel for Brent remains in place, with any news regarding the Strait of Hormuz capable of shifting quotes by several dollars per session;
- gas: Europe's lagging storage fills makes winter TTF futures vulnerable to weather and geopolitical shocks;
- OPEC+: the pause in increasing quotas and negotiations over limits for 2027 will support prices in the second half of the year;
- electricity: the deficit of flexible generation in Europe sustains high spot prices and interest in investments in storage;
- risks: escalation in the Middle East, failure of US-Iran negotiations, and a cold winter in Europe are the main catalysts for a new price rally.
The energy market as of August 2026 exists in a new reality: geopolitics has once again become the primary price-determining factor, and the margin for error in the global energy system has significantly narrowed. In these conditions, the risk premium in the prices of oil, gas, and electricity, it seems, will remain for the long term.
