Oil Price Falls Below $90: Which European Energy Stocks Come Under Pressure

Brent crude fell on August 25, 2026 to $89.44 per barrel and thus for the first time in weeks below the psychologically important mark of $90. The decline of 2.67 percent within 24 hours continued the losses of previous days. Just on August 20, the barrel had traded at $95.40 – a drop of nearly six dollars within a week.

EIA Lowers Forecast: Average of $85 in Third Quarter

The US Energy Information Administration (EIA) published its short-term energy outlook on August 25, 2026 and forecasts an average Brent price of around $85 per barrel for the third quarter of 2026. For 2027, the agency expects a further decline to an average of $69 per barrel once global inventory levels are rebuilt and crude oil production has largely recovered by early 2027.

The EIA cites ongoing transit restrictions through the Strait of Hormuz as the main driver of current price dynamics. The agency assumes these bottlenecks will persist through the end of August and cause production losses of approximately 0.6 million barrels per day through the end of 2027. In parallel, the US government is intensifying economic pressure on Iran and its trading partners, which is creating uncertainty among investors about potential impacts on oil flows and tensions with China – the main buyer of Iranian crude.

Which European Energy Companies Are Affected

Falling oil prices burden the margins of integrated energy companies. Companies such as Shell, BP, TotalEnergies and Eni – the largest listed energy stocks in Europe – typically respond sensitively to sustained price declines below the $90 mark. Integrated oil and gas companies are enterprises that operate along the entire value chain: from exploration and production through refineries to the distribution of fuels and petrochemical products. While lower crude oil prices can ease refinery operations through cheaper feedstocks, these companies are usually more heavily burdened by lower revenues from the upstream segment – that is, extraction and production.

Pure exploration and production companies such as Harbour Energy, Aker BP or OMV come under even greater pressure. These companies generate their revenues almost exclusively from the extraction of crude oil and natural gas. A price decline from $95 to below $90 per barrel immediately reduces operating cash flow and can delay or postpone investment decisions for new production projects.

Inventories Remain Tight – Despite Price Pressure

The EIA expects US commercial crude oil inventories to remain below the five-year low (2021–2025) through the end of 2026. The agency cites increased US crude oil exports, reduced imports and high refinery utilization since mid-April as causes. Net crude oil imports to the US are expected to remain below average through 2027 as international demand for US crude is strong.

Reduced oil transport through the Strait of Hormuz lowers global inventories in the coming months but still keeps crude oil prices near the level of the first week of August. The EIA expects most production volumes to return near pre-conflict levels by early 2027.

Parallel Movement in the Natural Gas Market

The US natural gas market is also showing weakness. The Henry Hub spot price – the key price reference for North American natural gas – is expected to reach an average of $2.87 per MMBtu (Million British Thermal Units) in the third quarter of 2026, 50 cents below the July forecast. The EIA attributes this to near-record inventory levels ahead of the heating season in October, reduced demand from LNG facilities (due to maintenance work at Freeport LNG) and robust natural gas production.

European energy companies with strong natural gas operations – such as TotalEnergies or Equinor – could be further burdened by the parallel price trough in both fossil fuels if the price weakness spreads to international markets.

Outlook: Recovery Expected in 2027

The EIA forecast from August 25, 2026 signals that prices will remain at or below current levels in the current quarter. Only with the rebuilding of global inventories and the normalization of production in early 2027 does the agency expect a more stable market situation – albeit at a significantly lower price level. For European energy stocks, this means: Margin pressure is likely to persist as long as Brent trades below $90 and fundamental market conditions do not support a rapid recovery.