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IEA warns that the oil gap in 2026 will increase due to the delayed return of normal Gulf flow
The International Energy Agency announced on Friday that global oil demand and supply will be lower than originally thought. This is because the Iran War has not been resolved, and the return to 'normal Middle East flows' until 2027 is delayed. Fuel prices are also expected to rise as a result. Crude prices have reached $110 per barrel for the first week since May due to an increase in attacks on oil tankers along Middle East shipping routes. This increase is overshadowed, however, by the record-breaking price of diesel. The IEA has now predicted that the world's oil supply will decline by 5.7 millions barrels per day in?2026, which is an increase from a previous drop of around 4%. The world's oil supplies are short and inventories are being used at an unprecedented rate. The IEA reported that global stocks dropped by 3.1 mbpd during August. In a report published every month, the IEA - which advises industrialised nations - stated that "Inventories played a critical role in balancing markets to date." "With buffers'shrinking' and the 'global refining systems stretched to the limits, the need to resolve the conflict in the Middle East - and the Russia/Ukraine War, now in its fifth year – is greater than ever in order to avoid further tightening of the market." The demand is also lower than expected due in part to the record fuel prices. The IEA predicted that world oil demand 'will fall by 2.5 million bpd in this year. This is more than their previous estimate of a 1.6million bpd drop.
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Sources say Asian refiners are seeking a Brent price swap in Saudi crude term negotiations
Two Asian refiners, according to sources familiar with the matter, have asked Saudi Aramco to switch the benchmark for their long-term crude contracts from Dubai to ICE Brent. Middle Eastern price indicators have surged over Brent since August, due to the increasing tensions between Iran and the United States. The APPEC Conference in Singapore is an annual gathering of Middle Eastern producers and Asian refining companies to discuss long-term contracts. These are usually finalised by the end of the year. Sources said that refiners requested supplies for 2027 during this week's discussions. They cited the increased volatility of the Middle East benchmark, as the amount of tradeable oil has decreased since a number of grades were removed from the Strait of Hormuz at the start of the Iran War. One of the producers said that other Middle Eastern producers have also received the same request to change benchmarks. Saudi?Aramco refused to comment. Saudi Arabia, which is the largest oil exporter in the world, releases monthly official selling price (OSP) differentials from the average of Platts Oman and GME Dubai quotes for crude sold on a term basis. Aramco's and other producers' reactions to renewed requests for a "change in benchmarks" were unclear. The disruptions in shipping and the uncertainty caused by conflicts in the Middle East also clouded future prospects for supply. This raises questions about how much crude oil producers are able to deliver. Platts 'Dubai and Oman Futures' traded on the Gulf Mercantile Exchange on Thursday stood at $119.40 a barrel and $119.30 a barrel, respectively. This was a multi-month high level. Brent crude futures closed at $101.75 at Asia’s market close. Cash premiums on Dubai and Oman crude have also reached multi-month highs, at $26,91 and $26,81 per barrel, respectively, reflecting the acute shortages in the physical market. Dubai and Oman benchmarks have experienced similar volatility in the past. Cash-market premiums soared in March after aggressive bidding from major trading houses pushed benchmark-linked prices higher.
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IEA cuts further Russian oil production forecasts due to Ukrainian attacks
The International Energy Agency announced on Friday that it had again revised its?outlook on Russia's oil output due to the ongoing Ukrainian drone attacks on energy infrastructure. The oil production in?Russia has declined due to the Ukraine's attacks on energy infrastructure and refineries. In its monthly review, the Paris-based IEA stated that Russia's crude production forecast?was reduced by 125,000 barrels a day to 8,7?million bpd by 2026. By 235,000 bpd by 2027 when?it was expected to average 8,6 million bpd. The draft government forecast, seen by?last weekend, showed that Russia has downgraded its oil?output for this year to the lowest level in 17 years and revised fuel exports for 2026-2027 because of the conflict with Ukraine. According to the IEA's report, Russia's oil output decreased by 200,000 barrels a day last month from July to 8,36 million bpd. The IEA reported that this is a 940,000 bpd drop from the peak in January 2026 of 9.3 millions bpd and 695,000 bpd down on the previous year's levels. Russia stopped publishing oil production data?in April of 2023. This was a little over a year after the beginning of the conflict in Ukraine. On 'Thursday, the Organization of Petroleum Exporting countries said that Russia's oil production fell by 160,000 barrels per day (bpd) in August compared to July. This brings it down to 8,718 million bpd.
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German environmental group sues to block Rosatom-linked nuclear fuel permit
BUND Niedersachsen, a German environmental group, has filed a lawsuit against the Lower Saxony state to overturn the approval of a?project to expand the Lingen nuclear power plant as part of 'a project 'linked to Rosatom in Russia. The case challenges the regional government's approval for a French subsidiary, Framatome, to produce nuclear fuel in Lingen (northern Germany) under a license agreement with a state-backed Russian company. Lower Saxony’s environment ministry - with guidance from the federal ministry of environment - had approved approval subject to a few?conditions despite concerns about Russia’s war in Ukraine. They said there was no 'legal basis' for rejecting. BUND, in collaboration with the anti-nuclear.ausgestrahlt group, claimed that the permit was a result of procedural errors and would pose a risk to security because of the?Rosatom role. They claim that the screening of the environment was based on old documents, and Rosatom's involvement in the filings wasn't fully disclosed. Olaf Bandt, BUND Germany's Chair, said that production and inspection could have been manipulated because Rosatom machines were used in Lingen for both manufacturing and quality control. Berlin said that it was critical of the cooperation, but the decision had been made in accordance with German nuclear laws. The EU should impose sanctions to address these 'concerns'. Rosatom and Lower Saxony have not responded to comments immediately. Framatome has said that the collaboration is a 'transitional step' to assist customers operating Russian-designed nuclear reactors in diversifying away from direct Russian purchase until it develops their own production technology.
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What are India's largest share offerings as NSE and Reliance Jio look to list?
The largest stock exchange in India, the National Stock Exchange (NSE), will open its initial public offer next week. The NSE IPO, which 'doesn't include any new capital being raised', would value the company at close to $46 billion. This would make it a third largest IPO in the country. Mukesh Ambani, the billionaire owner of Reliance Jio Platforms, is likely to launch his IPO later this year. It's expected to raise $3.8 billion and be the largest stock offering in India's history. The five biggest Indian IPOs so far: HYUNDAI MOTOR INDIANA Hyundai, India's 4th largest passenger vehicle manufacturer and the 3rd largest automaker in the world, raised $2.95 billion in October 2024, in what was India's 'biggest ever IPO'. The South Korean parent of the manufacturer sold a 17.5% share in a pure "offer-for-sale" where existing shareholders are selling shares and no new capital was raised. Jio Platforms will likely follow a similar strategy, as the company's largest investors are expected to dilute their shares. LIFE INSURANCE COMPANY OF INDIA The government made 205 billion rupees (2.17 billion dollars) by selling a 3.5% share in India's largest financial investor and insurer. This is far less than its original target of up to $12 billion. On their debut, the shares fell?nearly 8 percent. Paytm is an Indian fintech company that raised 183 billion rupees (about $36 billion) in November 2021 through a combination of a new share offering and a sale. Ant Group reduced their stake from 28% to 23% and SoftBank Vision Fund's holding was cut to 16%. Paytm's debut listing saw a drop of more than 27%, which was the largest in the history of Indian IPOs. TATA CAPITAL Tata Group Financial Services raised 155 billion rupees (approximately $155 billion) in October 2025. Tata Sons, IFC and other companies sold?in an offer for sale component along with a new issue. This was the largest IPO ever by a non-banking financial firm in India. The shares were listed at a small premium of 1.23%. LG ELECTRONICS INDIA In a pure sale offer, LG Electronics of South Korea sold a 15% stake in its Indian unit. This unit makes refrigerators, washing machine, air conditioners and televisions. The deal netted 116 billion rupees by October 2025. The IPO attracted bids of?about 4.4 billion rupees. It was the'most heavily subscribed Indian IPO' since?Reliance Power listed in 2008. The shares of LG surged by 50% in their first trading day, making the unit more valuable than its parent company based in Seoul.
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Lenders tell investors to show them the money as bond chaos spreads
Stella Qiu gives us a look at what the future holds for European and global markets. Maybe promising to borrow $1.3 billion to 'give' to each American who votes for your party wasn’t a good idea. This fiscal excess at a time of high inflation may not have directly caused the latest bond market 'rout', but it sure did not help. Bond markets are sending a message to governments around the world: If you want to continue borrowing, you will have to pay more. Much more. The benchmark 10-year U.S. Treasury Yield hit a three-year high in Asia of 4.9708%, closing in on 5% which could slow down the economy and disrupt the stock markets. The Australian bond yields reached 15-year highs.?New Zealand swap rate surged by 22 basis points. Even the Japanese benchmark government's yield rose 9 basis points as traders bet that central banks will have to raise rates to stop inflation running wild. Brent crude's surge back above $108 per barrel - now more than?50% higher from its lows in July - is the primary culprit. The Strait of Hormuz remains effectively closed and the narrow Bab al-Mandab Strait at the southern end of Red Sea could fall to Houthi control following the?capture of the Red Sea port of Mokha. This would lead to more shipments being rerouted through the Suez Canal or around Africa. This would create additional logistical problems and add weeks to Asian journeys. Imagine the impact on oil prices. Asia's shares are in the red, with Japan's Nikkei down over 2% and South Korea's KOSPI down more than 2%. European stock exchanges are likely to open calmer, as yields in Europe have already reached multi-decade highs. Wall Street?futures in Asia were not much different, as they awaited the arrival of liquidity. The U.S. CPI is the key factor that will determine the Federal Reserve's policy. It could also seal the deal for an increase in interest rates next week. Forecasts center?on an increase of 0.2% monthly in the core CPI measure, but the Fed's decision may come down to the 2nd or 3rd decimal places in the figure. Futures indicate a 70% chance that the Fed will increase rates on Wednesday. A "hot" result could easily push 10-year Treasury yields over the psychologically difficult 5% barrier. Donald Trump is watching and he will not be happy. It is clear that interest rates will remain higher, as the Gulf conflict may continue beyond the U.S. Midterm Elections, if not years. The following are key developments that may influence the markets on Friday. CPI data in the U.S. for August University of Michigan Consumer Sentiment Report U.K. Industrial output and trade figures for July
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Gasoline prices likely to rise in August for US consumers
U.S. consumer price increases are likely to accelerate in August, as gasoline prices?rebound after two consecutive monthly declines. This would confirm financial market expectations of a Federal Reserve interest rate hike next week. Labor Department's upcoming Consumer Price Index report will follow the Producer Price Index, which was released on Thursday. The Producer Price Index is the measure of inflation that the U.S. Central Bank uses to track its 2% inflation target. The Fed Governor Christopher Waller said at a NEXT Newsmaker Event that he would be inclined to maintain rates if the data showed that inflation pressures had cooled. Economists predicted that inflation would remain high and continue to spread as oil prices climbed back over $100 per barrel. Some economists saw price pressures continuing due to tariffs on imported goods, including the most recent against?Canada, a top US trade partner. What was once thought to be temporary reasons for high inflation now appears to be persistent. Joe Brusuelas is chief economist at RSM. He said that the war-induced energy crisis has now been going on for seven months, with no end in sight. The impact of tariffs, which was thought to be a more one-time effect, has been more lasting as the administration continues to use tariffs to achieve its political goals in a haphazard manner. A survey of economists has predicted that the CPI increased by 0.4% in August after increasing by 0.1% in July. Consumer inflation was expected to have risen 3.4% in the year up until August, a similar gain as July. The U.S. Energy Information Administration reported that gasoline prices in August averaged $4.192 per gallon, up from $4.064 a month earlier. Food prices are expected to rise moderately over the next month, but year-on-year increases will likely be around 3.0%. The frustration over rising prices, particularly for gasoline and foods, has caused a sharp decline in the approval rating of President Donald Trump and could cost him control of his Republican Party in November's midterm elections. A TAME CORE CPI REASONABLE READING IS EXPECTED The CPI, excluding volatile components such as food and energy, is expected to increase by 0.2% following a similar rise in July. Rents, clothing prices and new vehicles are among the categories that would be reflected in the tame increase in core CPI inflation. The higher cost of jet fuel is likely to have kept the price of airfares high. The core CPI is expected to increase by 2.4% in the 12 months through August after rising 2.5% in July. The core PCE is below the CPI. After Thursday's PPI, economists estimated that August's core PCE index would range from a gain of 0.15% to a gain as high as 0.28 percent. Core PCE inflation increased by 0.2% in July. The estimates for the increase in core PCE inflation year-on-year ranged between 3.2% and 3.3%. Core PCE inflation?advanced by 3.3% over the past 12 months, up to July. Some economists believe that the August PCE report could include changes in the methodology which will lower the core rate of inflation by a few basis points. According to CME's FedWatch, the financial markets priced in an approximately 70% chance that the Fed will raise rates by 25 basis points at its policy meeting on September 15-16. Fed's overnight benchmark interest rate currently ranges between?a 3.50-3.75%. Fed Chairman Kevin Warsh said last month that the central bank would "have to work" if they don't gain the confidence needed to believe inflation will fall to 2%. Trump has been urging the Fed to lower?rates. He posted on social media "LOWER THE RATES OR I'LL STOP TRADES WITH COUNTRIES WHERE WE HAVE A DEFICIT." The rise in yields for long-term U.S. Government bonds has been blamed by economists on what they call political intimidation. Some people expected the Fed would tighten its policy on Wednesday in order to demonstrate its independence. John Ryding is the chief economist at Brean Capital. He said, "A rate increase by the Fed on 16 September would be a strong declaration underlining the institution's independent. I expect them to do that, even without knowing the August inflation figures."
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Eight people are injured in Kyiv by Russian air strikes, while Ozon is hit in Saratov
On Friday morning, Russian air strikes in Kyiv injured eight people and caused a fire at a nine-storey apartment building, according to the city's authorities. This was after Moscow had taken a brief break from its attacks in the Ukrainian capital for the trip of U.S. ambassadors. The footage shows servicemen attempting to extinguish a fire in an apartment building where windows have been blown out. After a short pause during the visit of Donald Trump's negotiators to Moscow and Kyiv, Russia resumed its almost constant air attacks against Kyiv. The Kremlin began the war by invading Ukraine 2022. Roman Busargin, the regional governor of Russia's Volga River region, said that drones from Ukraine?damaged civil infrastructure in Saratov on the central Volga River, adding that no one was injured. The Russian ecommerce company Ozon announced on Telegram, that a drone attack in Ukraine caused an fire at its logistic hub in Saratov. This is the latest of more than two dozen warehouses that were recently targeted by both Ozon and Wildberries. Saratov, which is a frequent target of Ukrainian airstrikes, including one earlier this week. It's home to an oil refinery operated by the state oil company Rosneft as well as other industrial and military installations. Local authorities reported on Telegram that a missile strike in 'the city of Volgograd, south of Saratov, also on the Volga River caused two injuries after it hit a residential building. The debris from this attack also damaged an industrial facility. The post didn't provide any details about the industrial plant. The Volgograd refinery, which is one of Russia's largest?by processing capability, and is run by Lukoil?is located?outside the city. We could not verify these reports immediately. Russia and Ukraine deny targeting civilians.
Nearly one third of India’s coal-fired power plants are running on low fuel supplies.
Government data revealed that despite efforts by the government to increase fuel supplies, nearly a third (33%) of India's coal-fired plants operate with "critically low" fuel stock levels. This is because an extended period of hot weather has kept electricity demand high.
India's peak electricity demand, which is a measure for the maximum amount of electricity required, hovers around the record 270.70 Gigawatts reached in May.
The demand for electricity has been around 267 GW in the last few days, driven by an El Nino weather pattern and increased cooling requirements.
Central Electricity Authority data showed that the number of power plants with coal inventories below 25% or only capable of producing power for three days, rose sharply from 45 to 59 on September 9, up from 45 at the end of August.
Manoj Kumar is an analyst with the Centre for Research on Energy and Clean Air.
Analysts said that while clean energy, mostly solar power, is meeting most of the electricity needs during the day, inadequate battery storage and lower levels of water reservoirs are placing pressure on coal-fired generators.
Kumar said that India needs to increase coal supplies to utilities via the rail network in the near term to maintain normal levels of stock.
India deployed 444?or rakes? on September 6, up from 370 the previous day, to increase coal?supplies? to power plants.
Coal India, and its subsidiaries, have also increased coal shipment by road.
Coal India, world's largest coal miner, has said that it holds adequate stocks at its pitheads of 76 million tons.
(source: Reuters)