Weekly · Energy Crisis and Stagflation · September 27 – October 3, 2026

Key points

Global Fuel Crisis

On September 30, the US Department of Energy proposed releasing 40 million barrels of crude oil from the Strategic Petroleum Reserve as part of the final tranche of a coordinated IEA release. On October 2, Chinese companies suspended exports of petroleum products to all countries except Hong Kong and Macau. On October 3, Trump announced that Europe had agreed to release approximately 100 million barrels of diesel fuel from strategic reserves. Russia extended its ban on diesel and fuel oil exports until October 31, while the US refused to impose a similar ban. Gasoline prices in the US exceeded $4 per gallon, and diesel prices exceeded $6 per gallon. Brent futures for December delivery traded at $101.99 per barrel, and WTI futures for November delivery at $92.45.

Deadlock in US-Iran Negotiations

On September 27, Trump rejected Iran's proposal for a ceasefire, which envisaged the cessation of hostilities and the opening of the Strait of Hormuz within seven days. On September 29, Trump acknowledged the possibility of Iranian involvement in an incident at Fairford Air Base in England, where five British citizens were detained; Iran categorically denied these accusations. On September 30, it was reported that Trump's advisors considered the possibility of a war with Iran lasting until 2029. On October 1, Brent futures for November delivery closed at $103.53 per barrel, showing a monthly increase of approximately 14%. EIA data showed a decline in US gasoline and distillate inventories. On October 3, the head of Iran's National Gas Company, Saeid Tavakoli, reported a 14% year-on-year decrease in gas supply to the network due to incidents at the South Pars field.

Stagflation and the Bond Market

US Treasury yields reached multi-year highs: 10-year bonds traded above 5.2%, and 30-year bonds above 5.5%. On September 28, the probability of a Federal Reserve rate hike at the October meeting was approximately 70%. On September 30, PCE inflation data came in below forecasts (3.4% year-on-year), reducing expectations for an October rate hike to 30%. However, on October 3, employment data showed a sharp drop in job creation, and hourly wage growth (0.13%) lagged behind consumer price growth (0.53%). The yield on 30-year UK gilts exceeded 6% for the first time since 1998, while French bond yields reached 4.866%, raising concerns about a debt crisis in Europe.

Crypto Asset Regulation in the US

The CLARITY Act, which defines SEC and CFTC oversight of crypto assets, failed in the Senate. On October 1, the SEC issued a five-year exemption allowing platforms to trade tokenized US stocks on the blockchain using automated market makers, provided that participants are verified and margin trading is absent. On October 2, the SEC proposed a 760-page rule for custodial services for investment advisers and funds, permitting self-custody only in the absence of a qualified custodian. With Senators Cynthia Lummis and Tom Tillis leaving before the midterm elections, there are no realistic paths to resume work on the bill by the end of the year.

Capital Requirements for UBS

On September 27, the Swiss Council of States voted 33 to 10 in favor of requiring 90% capital in hard currency for foreign subsidiaries of UBS. UBS called this measure "excessive tightening," requiring approximately $16 billion in additional capital and increasing annual capital costs by $2.5 billion. The bank's Common Equity Tier 1 ratio was 14.4% as of the end of June. MP Hans-Peter Portmann prepared a counter-proposal requiring 75% capital for discussion in the National Council in early December. Reports of a possible relocation of UBS headquarters from Switzerland were denied by the bank.

European Energy Security

EU gas storage levels were at a record low of 71%, and prices reached €73 per MWh. On September 30, EU Energy Commissioner Dan Jørgensen stated that preparations are underway for a "very harsh winter," lowering the target fill rate to 80%. Germany ordered state importer SEFE to add the equivalent of 8 TWh of gas to storage facilities by December 15. Gas reserves in Ukraine stood at 10.5 billion cubic meters, which is 79.5% of the minimum required for the heating season. In the UK, energy bills are expected to rise by 16% by January to £1,999 for 20 million households.

What This Means

The energy crisis and stagflationary trends are shaping a new reality for capital expenditure planning and risk management. If you have exposure to energy-intensive operations or logistics in Europe and the US, cost inflation risks persist—heightened vigilance is required regarding supplier contracts and hedging. If your liabilities are sensitive to interest rates, be prepared for volatility amid uncertainty in Federal Reserve and ECB policy. Monitor official US inflation data (CPI on October 14) and Federal Reserve decisions at the October 27-28 meeting: if inflation comes in above expectations, the probability of further rate hikes will increase. Regarding crypto assets, if you are developing products based on tokenized securities, ensure they comply with SEC exemption restrictions (verification, volume limits, no margin). In Switzerland, if you work with UBS or similar structures, track the debates in the National Council in December: the adoption of strict capital requirements may affect the availability of credit lines.

Under the Radar

Despite attention to macroeconomic indicators, a number of events are shaping long-term trends. China faced a three-year high in coal prices (986 yuan per ton), signaling pressure on energy-intensive industries in Asia. In Switzerland, glaciers lost 5.5% of their volume over the year, with long-term consequences for water resources and tourism. The EU is discussing an industrial acceleration act that could provide advantages to European suppliers in public procurement, including in energy and batteries, with possible social and environmental criteria for "European" manufacturer status. These factors are gradually changing the landscape of supply chains and regulatory requirements.

Our read

The period is characterized by escalating geopolitical tensions and stagflationary trends in the global economy. On the escalation/de-escalation axis, the deadlock in US-Iran negotiations dominates, maintaining a risk premium in oil prices and threats to the Strait of Hormuz; an official announcement of a ceasefire or the opening of the strait would be a reversal signal. On the financial conditions axis, tightening is observed: government bond yields have reached multi-year highs, and expectations for Federal Reserve rates remain volatile; a sustained decline in PCE inflation and consistent yield reductions could indicate easing. On the systemic stress axis, the key factor is the energy deficit and low gas reserves in Europe, creating risks for industrial production; a stabilization signal would be the resumption of Chinese petroleum product exports and successful filling of European storage facilities. The overall signal is mixed: geopolitical risks remain high, and economic data indicates stagflationary pressure, requiring market participants to maintain heightened readiness for volatility.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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