Middle East Crisis Gas Prices / Oil Market

No gas aid from Norway – cannot increase production

The Norwegian energy sector does not have the space to increase natural gas production to compensate for the loss from the Middle East. Energy Minister Terje Aasland tells Bloomberg that producers are already working close to their maximum capacity.

– We hope this will not be a long-term situation, he says.

Analyst: Europe's gas prices more worrisome than oil prices

Gas prices in Europe continued to rise on Tuesday in the wake of unrest in the Middle East. The TTF futures, which are Europe's benchmark, had surged another almost 50 percent to 65 euros per megawatt hour by lunchtime.

Stifel analyst Chris Wheaton tells CNBC that he is starting to worry that continued disruptions could cause an energy crisis in Europe and a price rally similar to the one in 2022.

- We are much more worried about European gas prices than about oil prices, he says.

Goldman Sachs analyst Sven Jari Stehn is on the same track and notes that higher energy prices are dampening growth in all countries.

- Except for Norway, which produces and exports oil, he tells CNBC. 

Oil Market
Expert: Gasoline prices could skyrocket if the war continues

If the war in the Middle East drags on, the price of gasoline at the pump could rise 10 percent in a month. This is what Handelsbanken's commodity expert Christian Kopfer tells TT.

Oil prices have skyrocketed after the US and Israel launched their attacks on Iran this weekend. Iran has responded by closing the Strait of Hormuz, where a large part of the world's oil ships pass.

– There is very limited access through the strait, if any. As long as it is like this, prices will only continue to rise, says Kopfer.

At the time of writing, fuel oil is trading at $84 a barrel. If it reaches over $100, the price of gasoline would in turn climb to about SEK 17.50 per liter – an increase of 10 percent from today's level.

ISW: Iran War Could Give Russia More Oil Money

Iran's threat to attack ships in the Strait of Hormuz, and rising oil prices, could help Russia reverse more than a year of falling oil revenues, writes the ISW think tank in its daily situation analysis.

If oil prices remain high, they could keep Russia financially afloat and finance the war in Ukraine in the near future, writes ISW, adding:

"However, it is unlikely that Iran can successfully maintain a blockade of Hormuz long enough for Russia to benefit from the current oil price increase in the long term."