Key Friday Morning Highlights: Major Events in the Energy Sector
- Oil: Brent is trading around $88–90 per barrel, WTI in the range of $83–85; weekly increase exceeds 6%.
- IEA: 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 increase in quotas for September approved (+188 thousand b/d); the alliance prepares for a pause until the end of the year.
- Gas: EU gas storages are only about 55–58% full — approximately 22 percentage points below the five-year average; TTF is almost twice as expensive as at the beginning of the year.
- Russia: Ban on gasoline exports extended until January 31, 2027; diesel export restrictions are in effect until the end of August.
Oil Market: Brent at $90 — Geopolitical Risk Premium Remains High
Oil prices end the week near two-month highs. The North Sea Brent remains within the $87–90 per barrel range, while American WTI is around $83–85. Over the past month, Brent has increased by approximately 4–14% depending on the contract, with an annual gain exceeding 30%. Volatility remains extreme: in July, prices fluctuated within a $40 per barrel range, reacting to every signal from diplomatic channels. At the same time, the forward curve is in deep backwardation — contracts for 2027 are trading $8–10 below the nearest ones, reflecting expectations for a gradual normalization of supply following de-escalation. Global oil inventories have fallen below 7.9 billion barrels — the lowest since spring 2025; the accumulated reduction of reserves since the onset of the conflict reached 410 million barrels.
IEA Report: Supply Declining Faster than Demand
The August report released on Wednesday has become the key fundamental benchmark of the week. The agency has again downgraded its forecasts: global oil supply in 2026 will decline by 4.3 million b/d — to 102 million b/d, as production growth in the Americas (+1.4 million b/d) only partially offsets losses from the Middle East and Russia. Production in the Persian 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, 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 bottom being reached: in the fourth quarter, demand is expected to grow again, and in 2027, assuming de-escalation, supply may jump by 8.3 million b/d to 110.3 million b/d, leading the market into surplus.
OPEC+: Cycle of Quota Increases Concluded, Pause Ahead
OPEC+ approved the final increase in quotas in the current cycle during its August 2 meeting — by 188 thousand b/d starting in September. This step marks the completion of a phased cancellation of the voluntary reduction of 1.65 million b/d agreed upon in 2023 by seven key participants (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman). Formally, Russia's September quota will be 9.949 million b/d, while Saudi Arabia’s will be 10.478 million b/d. However, due to military risks and logistical constraints, increases are largely “paper-based”: actual production in several countries is significantly below permitted levels. According to delegates, the alliance plans to take a pause in the fourth quarter — quotas are likely to be frozen until negotiations regarding parameters for a 2027 deal begin. The internal stability of the group remains in question: the UAE has exited OPEC and OPEC+, while Iraq is publicly seeking an increase in its individual limit.
Geopolitics: The Strait of Hormuz — Main Risk for Global Energy
The diplomatic track between the U.S. and Iran remains stalled. The memorandum signed in mid-June for a ceasefire has effectively collapsed within 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 Strait area. Washington is increasing economic pressure on Tehran, including expanding sanctions and a maritime blockade of Iranian oil exports. For the global market, this means the persistence of a "risk premium" in oil and LNG prices: 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 reduce prices by $10–15 per barrel — conversely, renewed escalation threatens a return to spring highs when Brent approached $120.
Gas Market: Europe Enters Winter with Supply Deficits
The European gas market remains tense. EU underground storages 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 achieving even that is in doubt: injection rates are lagging behind schedule, LNG imports are 20–25% below long-term norms, and Qatari shipments via Hormuz are recovering very cautiously. An additional blow comes from the extension of the emergency downtime of the Norwegian Ormen Lange field until February 2027, which removes over 1 billion cubic meters from the winter balance. TTF prices range between €55–62 per MWh, remaining about twice as high as early-year levels. Analysts warn: if injection rates do not accelerate, the market will begin to factor in winter deficits as early as September — following a scenario reminiscent of 2021.
Power and Renewables: AI Data Centers Reshape Energy Balance
Global electricity generation is being primarily driven by demand from the artificial intelligence sector. Electricity consumption by data centers in the U.S. has increased from 23 GW in 2023 to around 42 GW in 2026, with estimates indicating that by 2030 they could account for more than 10% of total U.S. electricity generation. This shift is changing the investment logic of the industry:
- Hyperscalers are entering into long-term contracts for nuclear generation—ranging from the revival of power units to agreements for thousands of megawatts of "carbon-free" capacity;
- The commissioning of solar and wind power continues to set records, but load growth rates are catching up with the pace of renewable energy expansion;
- Network capacity deficits and extended connection timelines ("time-to-power") are delaying the launch of new facilities by 1.5–2 years and stimulating the development of microgrids, storage, and on-site generation.
For investors, this indicates a multi-year cycle of capital investments 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 could have predicted a few years ago. According to U.S. federal statistics, coal generation in the country surged by 13% last year — increased demand from data centers and air conditioning during hot seasons prompted energy companies to restore operations at plants poised for closure. In Asia, coal remains a cornerstone 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 near term, coal generation is expected to retain a significant share of the global energy balance despite decarbonization goals.
Russia: Export Restrictions and Fuel Market Stabilization
The domestic 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; diesel export restrictions remain in effect until the end of August and, according to Deputy Prime Minister Alexander Novak, will be lifted as the balance stabilizes. The reason for these strict measures is the reduction in fuel production following drone attacks on refineries and heightened seasonal demand. Wholesale and retail gasoline prices continue to rise, and market participants do not expect a significant correction before the fourth quarter. In the export segment, Russia retains its position as the largest oil supplier to India and China, although actual production — around 9 million b/d — remains below the OPEC+ quota due to infrastructure constraints.
What Investors Should Watch: Calendar and Scenarios
Key indicators for market participants in the energy sector over the coming weeks:
- U.S.-Iran Diplomacy: Any signals regarding the resumption of negotiations related to the Strait of Hormuz will be a major price-driving factor for oil and LNG;
- OPEC+ Meeting in Early September: Confirmation of a pause in quota increases and initial outlines of a deal for 2027;
- Gas Injection Rates into European Storage Facilities: Lagging behind the 80% target by November risks an early "winter" rally in TTF;
- Dynamics of Global Oil Inventories: Continued drawdowns in reserves will support backwardation and prices above $85;
- Russian Fuel Market: Timelines for lifting restrictions on diesel exports and stabilization of gasoline prices.
The base scenario for the fall — sustained elevated prices for oil and gas amid high volatility: the market will balance between a record physical supply deficit in recent years and the prospect of a sharp surplus in 2027 in the event of de-escalation in the Middle East. This period poses heightened risks for the energy sector — while simultaneously offering historically high premiums for effective risk management.
