Oil and gas continue to rise in price. The markets are waiting for the US decision whether to join the Israeli campaign against Iran. In the meantime, Iran itself is increasing oil exports, and Ukraine was the first to suffer from the suspension of Russian gas transit. Fuel prices in the country exceed the European ones by 50%.
Oil
After the jump last week, oil quotes calmed down. But black gold continued to rise in price. The markets are waiting to see if the United States will enter into the conflict between Israel and Iran, which this week turned into a monotonous exchange of blows. The cost of the benchmark North Sea Brent rose in a week from $ 74 to $ 77 per barrel. On Friday afternoon, quotes rose to almost $ 79, but the White House postponed the decision on US participation in the conflict in the Middle East.
"As long as Israel and Iran continue to attack each other, there can always be an unintended action that will escalate the conflict and affect the oil infrastructure," PVM analyst John Evans told Reuters.
Earlier, Iran threatened to close the Strait of Hormuz, a vital route for oil exports from the Middle East. But so far it has only increased exports, which also goes through the strait. Israel is hitting Iranian refineries and hundreds of thousands of barrels are being released.
Giovanni Staunovo from UBS notes that oil exports from The Persian Gulf remains stable and there is no shortage of supplies.
According to Panmure Liberum analyst Ashley Kelty, the conflict will escalate if Israel hits the export infrastructure, and Iran stops shipping through the strait in response. Then the price of oil at $ 100 per barrel will become a reality.
Gas
The price of gas in Europe followed the path of quotations last year. During the week, deliveries for a month in advance from the TTF exchange went up from $ 461 to $ 494 per thousand cubic meters. A year ago, the quotes were $ 54 lower, but they also started to grow. Then the market was actively discussing the possibility of stopping the transit of Russian gas, now there are possible disruptions in the supply of Qatari LNG in the event of an escalation of the war between Israel and Iran.
Against this background, the European Commission has presented a final plan for the complete abandonment of Russian gas — until 2028.
The roadmap turned out to be not very timely, as gas is getting more expensive, and in Brussels continues to declare that they do not expect serious economic shocks.
Obviously, the decision of the European Commission is political. Slovak SPP immediately announced that it could receive a lawsuit from Gazprom for $ 16 billion, and additional costs for alternative gas and its transportation services could amount to 500 million euros per year.
At the same time, the loss of transit of Russian gas through Ukraine was felt first by Ukraine itself. For the first time since November 2022, fuel stock quotes in the country jumped to $ 758. In a month and a half, the growth was 60%. Both Ukraine and Europe need gas, which is restoring reserves after the winter. At the same time, the stop of the transit of Russian gas left the country The EU is without a guaranteed 15 billion cubic meters, and Kiev is without the ability to buy fuel from Russia with minimal transportation costs. On some alternative routes, tariffs are more than $ 100 per thousand cubic meters, while traders also want to get a sufficient margin.
Along with gas, coal has also risen in price. Monthly deliveries from the Antwerp-Rotterdam-Amsterdam (ARA) hub increased from $103.6 to $107 per ton in a week. Experts expect that this will remove some of the volumes of coal from Asia to Europe and they will be compensated by Russian supplies. This situation should, however, last at least a month.