Energy market in a week: soaring gas price splits Europe

The oil market has not experienced such a shock since 2020. The operation of the United States and Israel, which began a week ago, will not be short, and Iran's retaliatory strikes are already painful. The price of oil, gas and coal has gone up sharply and so far the main loser may be Europe, which will have to pay the maximum bills.

Oil

The last time such a jump in oil prices occurred more than five years ago. The cost of the benchmark North Sea Brent rose from Friday to Friday by 28% - from $ 72.8 to $ 93 per barrel.

Qatar's energy minister told the Financial Times that he expects all energy exports from The Persian Gulf for several weeks and this will lead to an increase in oil prices to $ 150.

"Every day, as long as the Strait of Hormuz remains closed, prices will rise. The market believed that Trump might pull back at some point because he doesn't want high oil prices, but the longer this drags on, the clearer it becomes how big the risk is," Giovanni Staunovo, a commodities analyst at UBS, told Reuters.

For a week tankers, in fact, do not go through the Strait of Hormuz because of the fear of shipowners. Meanwhile, the Persian Gulf countries have already begun to reduce production, which is still hardly possible to export. Only Saudi Arabia and the UAE have oil pipelines that partially compensate for the shutdown of tankers.

The White House is trying to curb the rise in oil prices, but so far it has only been possible to slow down. Trump has stated that the United States will provide insurance and escort ships in In the Strait of Hormuz, but then this idea was abandoned.

True, Russian oil won. Washington has allowed Indian refineries to buy back Russian oil stored on tankers in the Indian Ocean within a month. But its price is already rapidly going up, as it is sold not at a discount, but at a premium to Brent — $ 4-5 per barrel.

Gas

The European gas market immediately received the most powerful blow. The price of fuel on the stock exchanges jumped by 61% on the news that the Strait of Hormuz is closed and Qatar and the UAE will not be able to export LNG. Deliveries for a month in advance from the TTF exchange increased in a week from $ 402 to $ 643 per thousand cubic meters.

Such prices in most countries The EU has not been seen since 2022. At the same time, no one knows what will happen next. Meanwhile, Europe is ending the season with minimal gas reserves in storage and by next winter it is necessary to purchase tens of billions of cubic meters.

Whether companies will buy gas in storage at the current price is a big question. The fact that fuel quotes for the next winter are lower than the current ones also plays against this, and it simply makes no sense for traders to work on a potential loss.

The topic of expensive gas has already caused a split among EU countries.

"The governments of seven EU countries, including the Netherlands and Sweden, have warned the European Commission against interfering in the energy price education system in Europe, as officials in Brussels is trying to find ways to reduce energy bills," Reuters writes.

Seven countries believe that imported gas is to blame for expensive electricity and call for an accelerated transition to green energy, and not to cancel, for example, the purchase of CO2 emission quotas. Coal and gas power plants are forced to buy them, which form the final electricity prices as a maneuverable generation.

"The letter provokes conflict with the governments of countries such as Italy, which announced national plans to exclude carbon charges from the bills of gas—fired power plants - an intervention that overturned It would be a pricing system," Reuters noted.

Coal did not escape the rise in price this week either. Deliveries for a month in advance from the Antwerp-Rotterdam-Amsterdam hub (ARA) went up from $106.7 per ton to $127 — by 18%.