Russian Foreign Minister Sergey Lavrov declared Moscow will not finance Armenia’s European Union integration through EAEU preferences, warning of gas agreement revocations. Concurrently, European benchmark gas prices surged past $92.95 per MWh due to low storage, while the premium on Russian ESPO crude in China reached a record $12.50 per barrel.
Global market
European benchmark TTF gas prices rose to $92.95 (€80.55) per MWh, staying near 2022 highs as depleted storage raised winter supply fears. In Germany, gas storage dropped to 56% full, the lowest level in 15 years, prompting Berlin to consider market incentives. Meanwhile, a leaked European Commission RED IV draft proposed replacing binding national renewable hydrogen targets with a flexible EU-wide goal. On financial markets, the Bank of England faced investor pressure to raise interest rates amid energy-driven inflation. In the United States, commercial crude inventories fell by 600,000 barrels to 423.4 million barrels, according to EIA data, while the US House Rules Committee advanced a sweeping Russia-Iran sanctions bill.
Russia & CIS
The premium on Russian ESPO crude delivered to China’s Shandong province rose to a record $12.50 per barrel over ICE Brent, according to Argus assessments. To protect domestic markets before winter, the Russian government extended its producer diesel export ban through October 31, citing delayed refinery repairs. The Central Bank of Russia estimated underlying August inflation at 5% to 6%, driven by fuel costs and ruble weakness. Meanwhile, wholesale gasoline prices fell across 20 Russian regions, led by a 6.7% drop in Sevastopol. In maritime shipping, a second Chinese Sea Legend container ship navigated the Northern Sea Route to the UK, while the Czech Republic’s Temelin NPP shut down its second reactor unit.
Armenia
Russian Foreign Minister Sergey Lavrov stated Moscow will not fund Armenia’s EU accession using EAEU trade preferences, following warnings that gas supply contracts could be terminated. In response, Armenian Prime Minister Nikol Pashinyan stated Armenia is exploring alternative natural gas imports from Azerbaijan, Turkey, and Iran should Russian deliveries stop. Despite geopolitical tension, retail petrol, diesel, and natural gas prices in Armenia remain stable. Domestic energy security is preserved under long-term agreements within the EAEU, shielding consumers from price volatility recorded by international market price assessments.