Oil prices held near six-week highs of $97.73 per barrel due to U.S.-Iran strikes choking the Strait of Hormuz, while global refining strains pushed retail diesel to record highs in the U.S. and Portugal. Meanwhile, Rosneft initiated shipments from its $157 billion Vostok project, and Russia pledged to maintain crude supply to India. In power markets, New York targets 5 gigawatts of new nuclear capacity, while auto giants adapt battery capacity for energy storage.
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Oil prices hold near six-week highs amid escalating Middle East conflict
Overland bypass pipelines lack the excess capacity required to absorb displaced maritime volumes during chokepoint closures, converting transit bottlenecks directly into global supply deficits.
settled at $97.73 per on Monday, hovering near six-week highs as military hostilities between the United States and Iran disrupted maritime traffic through the Strait of Hormuz. The escalation intensified over the weekend after U.S. forces struck three Iranian oil tankers near Kharg Island, prompting threats of retaliation from Tehran and fresh attacks on energy infrastructure, including Saudi Aramco's Jazan refinery. Daily flows through the Hormuz chokepoint have plunged from near 20 million barrels down to between 6 million and 8 million barrels, forcing regional producers to reroute shipments toward alternative terminals like Yanbu and Fujairah. Goldman Sachs responded to the supply squeeze by raising its Brent and price forecasts to $85 and $80 per barrel for December 2026, while India's crude basket breached the $100 threshold for the first time since May. Importers absorb these costs immediately through soaring freight rates, which have jumped over 400 percent on key Persian Gulf routes since late February.
Indian Crude Basket Price ($ per barrel)
India's crude import price climbed above $100 by early September.
When refiners run at full operational limits while switching yield to jet fuel, diesel supply bottlenecks translate into structural margin pressure across freight and agricultural logistics.
U.S. retail diesel prices climbed to $5.85 per gallon on Friday, surpassing the previous all-time high of $5.816 set in June 2022. Wars involving Iran and Russia have throttled global refining capacity and restricted fuel exports from the Middle East and Russia, which accounted for roughly a third of global diesel exports in 2025. The conflict in Iran has cut off refined products from the Persian Gulf through the Strait of Hormuz, while Ukrainian drone strikes on Russian refineries have forced Moscow to ban diesel exports. Because diesel powers the freight networks, farm equipment, and shipping fleets that move goods through the economy, higher fuel costs directly increase transportation expenses for everything from groceries to retail merchandise. Refiners have little room to compensate because they are running near 100 percent capacity while also shifting production toward soaring jet fuel demand. U.S. distillate stockpiles have fallen to record lows for this time of year just as the Northeast enters the winter heating season.
U.S. Diesel Price Record ($/gal)
Current diesel prices have surpassed the previous 2022 peak
State public power mandates clashing with ratepayer-backed subsidy freezes reveal how state-level political risk determines whether advanced reactor pipelines can secure grid-level deployment.
Oilprice.com reports that New York Governor Kathy Hochul wants 5 gigawatts of new nuclear capacity built across the state. The initiative includes at least 1 gigawatt developed by the publicly owned New York Power Authority alongside a separate 4 gigawatt push. Potential technology candidates include the Westinghouse AP1000 and the 300 megawatt BWRX-300 from GE Vernova Hitachi. Eight upstate communities including Jefferson, Oswego, and Schuyler have expressed interest in hosting the projects. NYISO warned in its 2026 Power Trends report that replacing over 4 gigawatts of baseload nuclear with less than 3 gigawatts of intermittent strains the grid. Downstate demand creates transmission bottlenecks for power generated upstate. Meanwhile, Energy Secretary Chris Wright has pushed to revive the roughly 2 gigawatt Indian Point facility, though Governor Hochul opposes reopening it. Senator Kevin Parker introduced pending legislation for a 30-month pause on taxpayer and ratepayer support for nuclear projects while a task force studies alternatives.
New York Nuclear Capacity Target (GW)
Hochul targets 5 gigawatts of new nuclear capacity led by a 1 gigawatt NYPA push.
Rosneft Ships First Crude From $157 Billion Vostok Oil Project
Rosneft's deployment of Arctic ice-class tankers over the Northern Sea Route proves Russia can build capital-intensive upstream infrastructure and access Asian markets without Western oilfield services.
oilprice.com reports that Rosneft has shipped the first cargo from its Vostok Oil project in Eastern Siberia, despite Western sanctions and the departure of foreign partners. The project holds an estimated 7 billion tons of low-sulfur crude reserves and relies on domestically produced top-drive systems and hydraulic rigs capable of drilling up to 6,000 metres. Peak production is targeted at up to 2 million barrels per day, following a two-year delay from original 2024 plans. The development carries an estimated price tag of $157 billion from 2019, with lifetime operational costs estimated at $170 billion in 2021. The first cargo was loaded onto a Russia-flagged Arc7 ice-class tanker at the Arctic port of Sever to serve Asian and western markets via the Northern Sea Route.
GM and Ford Pivot EV Battery Operations Toward Stationary Energy Storage
Repurposing stranded automotive battery manufacturing into grid storage lets legacy carmakers recover capital from EV write-downs by supplying power-hungry data centers.
oilprice.com reports that General Motors and Ford are repurposing underutilized electric vehicle battery capacity for stationary energy storage to capture surging demand from and the . GM took cumulative charges of $10.9 billion as it scaled back its electric vehicle expansion, while Ford absorbed a $19.5 billion write-down. Ford launched a battery energy storage business at the end of 2025 and plans to invest roughly $2 billion over two years to scale operations, targeting at least 20 GWh of annual deployments by late 2027. GM has partnered with Peak Energy to develop sodium-ion chemistry for grid-scale storage systems and previously supplied second-life battery packs to Redwood Materials. U.S. energy storage installations reached a record 20.2 GWh in the second quarter of 2026, bringing total installations in the first half of the year to 30.8 GWh.
U.S. Energy Storage Installations (GWh)
U.S. energy storage installations hit a record 20.2 GWh in Q2 2026.
Russia Vows to Continue Oil Sales to India Despite U.S. Tariff Threat
Secondary tariff bills that penalize sovereign buyers create an all-or-nothing trade trade-off, testing whether discounted bilateral barrels outweigh the loss of Western market access.
Oilprice.com reports that Russia will remain a key supplier to India, according to Russian Ambassador to India Denis Alipov. The statement follows U.S. congressional efforts to pass legislation proposing 100 percent on the biggest buyers of Russian oil and gas. The bill passed the Senate by an 86 to 11 vote, though it remains deadlocked in the House ahead of November mid-term elections. Moscow's envoy stated that Russia is ready to supply as much oil as India needs despite the tariff threat. Meanwhile, Indian crude imports from Russia eased in August from July highs due to Ukrainian attacks on export infrastructure and competition from China.
Record Fuel Price Increases Spark Protests in Portugal
Emergency fuel tax cuts paired with multi-nation pushes for windfall levies expose how European energy majors remain vulnerable to sovereign margin suppression when price shocks hit consumers.
Euronews.com reports that diesel prices in Portugal reached an all-time high on Monday, jumping 15 cents to 2.169 euros per litre. Petrol rose by 12 cents to 2.142 euros per litre, marking its highest level since the energy crisis following Russia's invasion of Ukraine in 2022. The increases sparked road protests organized via social media, drawing between 60 and 100 vehicles in a slow-moving convoy toward Galp's refinery in Sines and a horn-blaring demonstration on the 25 de Abril bridge linking Lisbon to Almada. Demonstrators protested mounting living costs while the government applied an exceptional reduction in the Tax on Petroleum Products to cushion the blow. Ministers from Portugal, Germany, Italy, Austria, Poland, and Spain subsequently wrote to Ireland's finance minister to request a discussion on an extraordinary tax on oil company profits at the upcoming European Union meeting on 18 and 19 September.
Fuel Prices in Portugal (euros per litre)
Diesel surpassed petrol to trade at a higher price per litre.
Surging fuel prices and persistent supply chain threats are driving aggressive energy developments across oil, nuclear, and storage sectors. It remains uncertain whether proposed U.S. tariffs on Russian crude buyers will successfully curb trade volumes without triggering further global price shocks.
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