Written by: Islam El-Sakka
Hydrocarbon markets witnessed a notable rise in oil and gas prices, driven by a state of tension and anxiety in the Middle East region. These movements come as a result of repeated attacks launched by the Houthis in Yemen against facilities in Saudi Arabia, in addition to fears of escalating confrontations between the United States and Iran, which sparked a state of confusion in global markets.
Rise in Brent and WTI crude prices
The price of a barrel of Brent crude, the approved international benchmark for pricing oil in Europe, recorded an increase of 1.03% to reach $114.34 for December delivery, a level close to its highest recorded levels since the beginning of last May. American crudes were not isolated from this rise either, as West Texas Intermediate rose by 1.67% to reach $101.13 for delivery the same month.
Political and military repercussions on supplies
Analyses indicate that political tensions directly contribute to these increases, as the prospects of carrying out new military strikes stand out, coinciding with the reinforcement of the American military presence in the region by deploying a second aircraft carrier. These developments affect the prospects of calming the situation and stabilizing oil flows, especially with the approaching legislative elections in the United States, where the issue of energy prices stands out as a decisive factor in the political scene.
Concerns regarding available oil volume and shipping costs
A state of uncertainty prevails regarding the quantities of actual oil currently available in the market. Despite the return of export volumes from Gulf countries to pre-war levels during recent weeks, the rise in maritime shipping costs associated with security risks, alongside limited production in global refineries, continues to put pressure on prices, particularly fuel prices.
Jump in European gas prices
In a related context, European gas prices, represented by the futures contracts of the Dutch TTF platform, recorded levels not seen since 2022. Prices rose by 3.95% to reach 92.53 euros per megawatt-hour. This rise is attributed to the decline in liquefied natural gas supplies from the Gulf region, recent attacks targeting a gas tanker off the coast of Yemen, in addition to low gas storage levels in Europe, which reinforced upward pressures on prices.
