Key Developments in the Energy Sector by Friday Morning
- Oil: Brent is trading around $88–90 per barrel, WTI in the range of $83–85; 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 third-quarter deficit of 1.8 million b/d.
- OPEC+: Final quota increase for September (+188,000 b/d) approved; the alliance is preparing to pause until the end of the year.
- Gas: EU storage facilities are only 55–58% full — approximately 22 percentage points below the five-year average; TTF is nearly double the price at the beginning of the year.
- Russia: The ban on petrol exports has been extended until January 31, 2027, with diesel export restrictions in effect until the end of August.
Oil Market: Brent at $90 — Geopolitical Risk Premium Remains High
Oil prices are ending the week near the highs of the past two months. The North Sea Brent is maintaining a range of $87–90 per barrel, while American WTI is around $83–85. Over the past month, Brent has risen by approximately 4–14% depending on the contract, with a year-on-year gain exceeding 30%. Volatility remains extreme: in July, prices fluctuated within a range of about $40 per barrel, responding to every signal from diplomatic channels. Furthermore, the forward curve is in deep backwardation — contracts for 2027 are trading $8–10 lower than the nearest contracts, reflecting expectations of gradual supply normalisation after de-escalation. Global oil stocks have dropped below 7.9 billion barrels — the lowest since spring 2025; the cumulative drawdown since the onset of the conflict has reached 410 million barrels.
IEA Report: Supply is Falling Faster than Demand
The August report released on Wednesday by the IEA has become the main fundamental benchmark for the week. The agency has once again downgraded its estimates: global oil supply in 2026 will decrease by 4.3 million b/d to 102 million b/d, as production growth in the Americas (+1.4 million b/d) only partially compensates for losses from the Middle East and Russia. Production in the Gulf countries recovered 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 disruptions in logistics chains, global consumption is expected to decrease by 1.6 million b/d in 2026 — with the strongest declines in Asia and the Middle East. However, the agency sees a "bottoming out": demand is expected to begin rising again in the fourth quarter, 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 surplus.
OPEC+: Quota Increase Cycle Concluded, A Pause Ahead
The OPEC+ alliance approved its final quota increase in the current cycle during the meeting on August 2, raising it by 188,000 b/d starting in September. With this move, seven key participants (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman) concluded the phased cancellation of voluntary cuts of 1.65 million b/d agreed upon in 2023. Formally, Russia's September quota will be 9.949 million b/d and Saudi Arabia's will be 10.478 million b/d. However, due to military risks and logistical constraints, the increases are largely "paper" in nature: actual production in several countries is significantly below permitted levels. According to delegates, the alliance plans to take a pause in the fourth quarter, with quotas likely to be frozen until negotiations for the 2027 deal begin. The internal cohesion of the group remains questionable: the UAE exited OPEC and OPEC+ in the spring, while Iraq is publicly demanding an increase in its individual quota.
Geopolitics: The Strait of Hormuz — Major Risk for Global Energy
The negotiating track between the US and Iran remains stalled. The ceasefire memorandum signed in mid-June effectively fell apart after a month: attacks on tankers in the Strait of Hormuz have resumed, and the conflict has spread to the Red Sea, where Houthis are attacking vessels in the Bab-el-Mandeb area. Washington is intensifying economic pressure on Tehran, including extending sanctions and implementing a maritime blockade on Iranian oil exports. For the global market, this means the continuation of a "risk premium" in oil and LNG prices: approximately one-fifth of global oil supplies and a significant portion of Qatari LNG pass through the Strait of Hormuz under normal conditions. Any progress in negotiations could quickly remove $10–15 from the price per barrel — conversely, new escalations threaten a return to spring highs, when Brent rose to $120.
Gas Market: Europe Entering Winter with Storage Deficit
The European gas market remains strained. EU underground storage facilities are only 55–58% full — this is the lowest seasonal level on record and approximately 22 percentage points below the five-year average. The filling target for November 1 has been lowered from 90% to 80%, but even achieving this is in question: injection rates are lagging behind schedule, LNG imports are 20–25% below multi-year norms, and supplies of Qatari cargoes through Hormuz are recovering very cautiously. An additional blow is the extension of the emergency shutdown of the Norwegian Ormen Lange field until February 2027, removing over 1 billion cubic meters from the winter balance. TTF prices are fluctuating between €55–62 per MWh, remaining roughly double the levels at the beginning of the year. Analysts warn: if injection does not accelerate, the market will start pricing in winter deficits as early as September — reminiscent of the scenario from 2021.
Electric Power and Renewables: AI Data Centres Reshaping Energy Balance
In global electricity markets, demand from artificial intelligence remains the main structural driver. Consumption by data centres in the US has surged from 23 GW in 2023 to about 42 GW by 2026, and by 2030, they could account for more than 10% of total US electricity consumption. This is altering the investment logic in the industry:
- Hyperscalers are signing long-term contracts for nuclear generation — from reviving power units to agreements for thousands of megawatts of "low-carbon" capacity;
- The commissioning of solar and wind capacities continues to break records, but the rate of load growth is already catching up to the pace of renewable energy construction;
- The deficit of grid capacities and extended connection times ("time-to-power") are delaying the launch of new sites by 1.5–2 years and stimulating the development of microgrids, storage and self-generation systems.
For investors, this signals a multi-year capital investment cycle in generation of all types, networks, and energy storage systems.
Coal: An Unexpected Beneficiary of the Energy Deficit
The coal sector is experiencing a renaissance that no one predicted a few years ago. According to federal statistics from the US, coal generation in the country surged by 13% last year — demand from data centres and air conditioning in hot seasons forced energy companies to reactivate plants that were poised for closure. In Asia, coal remains the backbone of the energy system: China and India are maintaining consumption near record levels, while high LNG prices are further enhancing the competitiveness of coal-fired power plants. Prices for thermal coal remain relatively stable amidst persistently high demand, and in the coming years, coal generation will maintain a significant share in the global energy balance despite decarbonisation goals.
Russia: Export Restrictions and Stabilisation of the Fuel Market
The domestic market for oil products in Russia remains under manual control. The government has extended the complete ban on petrol exports until January 31, 2027 — applicable to both producers and traders; restrictions on diesel exports will remain in effect until the end of August and, according to Deputy Prime Minister Alexander Novak, will be lifted as the balance is restored. The reason for these stringent measures is the reduction in fuel output following drone attacks on oil refineries and increased seasonal demand. Wholesale and retail prices for petrol continue to rise, and market participants do not expect a significant correction before the fourth quarter. In the export segment, Russia maintains its position as the largest supplier of oil to India and China, although actual production — around 9 million b/d — remains below the OPEC+ quota due to infrastructural constraints.
What Investors Should Watch: Calendar and Scenarios
Key benchmarks for participants in the energy sector over the coming weeks are as follows:
- US-Iran Diplomacy: Any signals regarding the resumption of negotiations concerning 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 initial outlines of the 2027 deal;
- Gas Injection Rates in European Storage: Lagging behind the 80% target by November threatens an early "winter" rally in TTF prices;
- Dynamics of Global Oil Reserves: Continued drawdowns will support backwardation and prices above $85;
- Russian Fuel Market: Timelines for lifting diesel restrictions and market stabilisation for petrol.
The base scenario for autumn anticipates sustained high prices for oil and gas amid high volatility: the market will balance between a record deficit in physical deliveries in recent years and the prospect of a sharp surplus in 2027 should de-escalation occur in the Middle East. For the energy sector, this marks a period of heightened risks — while also presenting historically high premiums for effective management of those risks.
