Energy Market Briefing

The UAE said its air defences detected two ballistic missiles fired from Iran towards its waters on Wednesday, one falling within its territorial waters and the other outside it, both landing in the sea without casualties. It was Iran's first known attack on the UAE since May, and Abu Dhabi responded by suspending all trade and financial dealings with Tehran until further notice. Iran has denied firing the missiles, calling the incident a false flag.

President Trump said on Tuesday that talks with Tehran have fallen apart, and the Financial Times reported on Wednesday that Iranian officials have weighed targeting US military assets based in Europe. The 60-day window set for a US-Iran peace deal expired on Monday without a breakthrough, and Iran's foreign minister said Washington is now the one asking to negotiate.

Shipping through the Strait of Hormuz remains far below normal levels despite Trump's claim that the strait has reopened; a cargo vessel attack this week killed one crew member. The US says its naval blockade remains in force even as it maintains the strait's mines have been cleared.

Brent crude has now risen for four consecutive sessions, adding around 4.5% over the past three, as traders see no sign of a breakthrough after almost six months of the US-Iran conflict. WTI is trading close to $85 a barrel.

The IEA estimates 8.3 million barrels a day of Gulf output remains shut in even as global supply rose 2.4 million barrels a day in July to 101.5 million barrels a day, still 6.3 million barrels a day below year-ago levels. World oil demand is now forecast to fall by 1.6 million barrels a day in 2026, 510,000 barrels a day more than previously expected.

Tight product markets have pushed Atlantic Basin refining margins to all-time highs as diesel, jet fuel and petrol cracks surge on seasonal demand, supply shortfalls and depleted stocks.

Ukraine's General Staff said its drones struck the Gazprom Neftekhim Salavat refining and petrochemical complex in Bashkortostan overnight, the fourth such attack on Russian refining capacity in three days. An earlier strike this month forced the Orsk refinery in Orenburg to suspend operations, with repairs expected to take up to six months.

Ukraine's Naftogaz said its facilities were hit 13 times over the past week alone, and nearly 300 times since the start of the year, as Russia targets gas production and storage sites ahead of winter. Ukrainian officials say Moscow is again 'weaponising winter' by aiming to strip civilians of heat and power.

The campaign against Russian refineries has begun to show up in fuel shortages at Russian filling stations, adding a further layer of disruption to global product markets already stretched by the Gulf standoff.