The energy market rollercoaster that began last February shows no signs of slowing down, with brief reprieves proving insufficient to ease the intense and sustained pressure brought on by the war involving the United States, Israel, and Iran. Specifically, Brent crude has surpassed $112 per barrel, while natural gas has climbed above €90 per megawatt-hour. If these are the prices during a period of relative ceasefire — amid ongoing attacks on energy facilities and vessels in the Persian Gulf — markets are now bracing for the possibility of a fresh US strike on Iran, as Washington currently appears to be shifting its focus away from the Ukraine war toward Tehran. Houthi attacks on Saudi Arabian infrastructure, including airports and oil installations, have already proven damaging, and further disruptions to energy supply cannot be ruled out.
Read more: Oil prices: New surge in international markets as natural gas rockets — Brent hits $110 per barrel, what to expect next week
Energy markets: Oil and US crude on the rise
Reuters reports that Brent recorded a 3.3% gain, while US crude is closing in on the $100 mark, having reached $99.94 — a 2.9% increase. Brent has not traded at such levels since May. As for natural gas, intraday readings of the European TTF benchmark index show it has reached €90.20 per megawatt-hour.
Instability persists in the Strait of Hormuz, and difficulties in shipping energy cargoes to Europe and Asia come as little surprise. Meanwhile, Saudi Aramco, Saudi Arabia’s national oil giant, has moved to protect its workforce by instructing employees to work remotely and leave the company’s headquarters in Dhahran. Yemen’s Houthi movement, acting on Iran’s behalf, is exerting pressure on markets in order to defend its patron’s interests. Saudi Arabia, it should be noted, is one of the world’s largest oil producers and exporters. As a result, these attacks are reverberating through global markets. Adding further tension to an already volatile region, the US has begun withdrawing diplomatic staff and their family members amid deteriorating security conditions.
The cold war of threats
A cold war of threats is currently underway. The US and Israel are keeping the prospect of a strike on Iran firmly on the table, while Iran has threatened to target Gulf infrastructure in retaliation, according to The Guardian. Nothing is definitive, but it is now widely understood that markets react not only to actual attacks, but also to posturing and rhetoric. The prospect of fresh strikes on oil facilities, refineries, or maritime shipping routes is stoking fears of additional supply shortfalls, as a prolonged disruption could affect both crude production and the availability of refined fuels.
It is now abundantly clear that developments in the Persian Gulf are having a ripple effect across Europe, including on natural gas markets. The region is a critical source of liquefied natural gas (LNG) for international markets. According to information cited by the Financial Times, European natural gas prices had been hovering near €88 per megawatt-hour in the preceding days — roughly three times higher than the levels recorded before the war with Iran.
At the same time, European natural gas storage levels have fallen below 75% of capacity, compared to 98% in 2023 — a development that keeps supply concerns firmly in focus ahead of the winter season. Nevertheless, the European market also shows signs of resilience, as increased LNG supply from alternative producers has offset a significant portion of the losses stemming from reduced flows from Qatar and the United Arab Emirates.
According to the same sources, global LNG supply remains approximately 4% below 2025 levels, while declining consumption and greater contributions from alternative electricity generation sources have helped ease some of the pressure on the European economy.
