As predicted in last issue, the peace agreement between the USA and Iran lasted less than a month before conflict resumed. This, combined with new escalation in the war between Ukraine and Russia, caused price gyration in the energy complex, led by oil, albeit to a lesser degree than previously as the build-up of ships in the Strait of Hormuz cleared. However, the situation may change from an oil shortage into a refinery product crisis in the coming months. At the time of writing, Iran and Oman are discussing a Strait of Hormuz plan, but this would not cover all vessels, meaning there is limited chance of success. The US administration says its talks with Iran are ongoing and if not successful, then the war will be reignited.
In more peaceful parts of the world, central banks are monitoring the inflationary impact from higher energy prices but did not raise interest rates during July. However, the markets are anticipating a higher ECB rate in the September meeting.
The currency markets have seen central banks from Japan and the USA selling US dollar against the Japanese yen for the first time in several years, forcing the dollar down about seven per cent. This has also slightly weakened it against the euro. The EUR/US$ exchange rate rose one per cent to US$1.1550, testing the bottom of the US$1.15-1.20 range.
Brannvoll ApS forecasts a range of US$1.10-1.25 in 2026, with an average of US$1.19. The VIX volatility index is still very low at 15 and shows no “fear” remaining below 20.
| PRICES AT A GLANCE - 6 August 2026 | ||
| Brent crude oil – bbl | US$82.50 | |
| Coal API 2 | 4Q26 | US$118.00 |
| Cal 2027 | US$119.00 | |
| Coal API 4 | 4Q26 | US$107.00 |
| Cal 2027 | US$108.00 | |
| Petcoke USGC 4.5 per cent S 40HGI | FOB | US$85.00 |
| CFR ARA | US$113.00 | |
| Petcoke USGC 6.5 per cent S 40HGI | FOB | US$80.00 |
| CFR ARA | US$108.00 | |
Oil
The collapse of the 60-day agreement sent Brent oil from US$70 up to US$95 before several statements concerning Iran/USA discussions brought the level back to US$82, with news of Ukraine hitting Russian export facilities supporting the price.
Underpinning the price was news that Houthis were attacking tankers in the Gulf of Aden, closing one of the alternative routes. The oil market now fears refineries may be forced to close if there are no secure streams of crude oil, which could lead to shortage of refined products.
The oil markets are still trading in backwardation with forward rates one year ahead at US$10 lower. Brent oil has risen 17 per cent MoM to US$82.50 back in a forecasted trading range of US$78-88. However, if spikes occur, a price of US$95 could easily be achieved. The TTF (Cal27) gas price is higher driven by oil and low EU storages below average at EUR42. EU gas storage has increased to 58 per cent but 12 per cent below 2025.
Brannvoll ApS forecasts a Brent trading range of US$55-125 and average of US$75 for 2026 (US$40 was added to the top due to the Middle East conflict).
Coal
The coal market has been resilient and almost unaffected by the Middle East developments, more impacted by threats and actions to the freight in the Black Sea. Weather in China has impacted in some degree on production. Colombian coal has been seen offered in the market again. The API2 4Q26/front quarter (FQ) contract rose one per cent MoM to US$118 and remains in the expected range of US$105-125, while the Cal27 contract rose seven per cent to US$117. API4 4Q26/FQ contracts were unchanged at US$107, staying in the US$100-120 range short-term.
Brannvoll Aps forecasts a API2 FQ contract range of US$85-130, averaging at US$100, and API4 in a range of US$80-125 in 2026.
Petcoke
The rise of petcoke prices continued during July, driven by higher discounts and scarcer discounted Russian coal. This led Turkish and Indian buyers back into the market, and combined with some refineries being offering less, the market reacted with quick increases. That China is still on the sidelines in expectation of a ban on high-sulphur product seems well imbedded in the current pricing.
As oil and slowly coal are rising so petcoke is underpinned and will be dictated by the near-term geopolitics. The USGC FOB 6.5 per cent contract is up eight per cent MoM to US$80, while the API4 discount slipped five per cent to 40 per cent. The USGC ARA 6.5 per cent contract rose by five per cent MoM to US$108 and the discount decreased to a less alluring 27 per cent. The USGC FOB 4.5 per cent contract rose six per cent MoM to US$85, with the FOB discount to API4 down to 36 per cent. The USGC ARA 4.5 per cent contract rose five per cent to US$113, lowering the discount to 23 per cent.
Brannvoll ApS forecast a range of US$85-105 (short-term up to 120) for the ARA 6.5 per cent contract in 2026, with an average of US$95 and a discount of 25 per cent.
