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Wall Street Journal
15-07-2025
- Business
- Wall Street Journal
European Gas Falls as Trump's Russia Deadline Alleviates Supply Concerns
0911 GMT – European natural-gas prices fall as President Trump's 50-day ultimatum to Russia signaled a more tempered response, easing fears of immediate supply disruptions. In midday trade, the benchmark TTF gas contract is down 1.5% to $35.30 euros a megawatt hour. However, Trump's 50-day deadline coincides with the start of Norway's seasonal gas maintenance in late August, which could introduce fresh uncertainty for European gas markets, according to analysts at Rabobank. Meanwhile, rising temperatures are threatening to boost gas demand in Asia and divert LNG cargoes away from Europe, heightening the risk of a supply squeeze at a time when the continent needs to bolster its gas reserves for the winter. (
Reuters
25-06-2025
- Business
- Reuters
Israel-Iran war highlights Mideast's declining influence on oil prices
LONDON, June 25 - The contained move in oil prices during the Israel-Iran war highlights the increasing efficiency of energy markets and fundamental changes to global crude supply, suggesting that Middle East politics will no longer be the dominant force in oil markets they once were. The jump in oil prices following Israel's surprise attack on Iran was meaningful but relatively modest considering the high stakes involved in the conflict between the Middle East rivals. Benchmark Brent crude prices, often considered a gauge for geopolitical risk, rose from below $70 a barrel on June 12, the day before Israel's initial attack, to a peak of $81.40 on June 23 following the United States' strikes on Iranian nuclear facilities. Prices, however, dropped sharply that same day after it became clear Iran's retaliation against Washington – a well-telegraphed attack on a U.S. military base in Qatar that caused limited damage – was essentially an act of de-escalation. Prices then fell to below pre-war levels at $67 on Tuesday after U.S. President Donald Trump announced that Israel and Iran had agreed to a ceasefire. The doomsday scenario for energy markets – Iran blocking the Strait of Hormuz, through which nearly 20% of the world's oil and gas supplies pass – did not occur. In fact, there was almost no disruption to flows out of the Middle East throughout the duration of the conflict. So, for the time being, it looks like markets were right not to panic. The moderate 15% low-to-high swing during this conflict suggests oil traders and investors have slashed the risk premium for geopolitical tensions in the Middle East. Consider the impact on prices of previous tensions in the region. The 1973 Arab oil embargo led to a near quadrupling of oil prices. Disruption to Iranian oil output, opens new tab following the 1979 revolution led to a doubling of spot prices. Iraq's invasion of neighbouring Kuwait in August 1990 caused the price of Brent crude to double to $40 a barrel by mid-October. And the start of the second Gulf war in 2003 led to a 46% surge in prices. While many of these supply disruptions – with the exception of the oil embargo – ended up being brief, markets reacted violently. One, of course, needs to be careful when comparing conflicts because each is unique, but the oil market's response to major disruptions in the Middle East has – in percentage terms, at least – progressively diminished in recent decades. There are multiple potential explanations for this change in the perceived value of the Middle East risk premium. First, markets may simply be more rational than in the past given access to better news, data and technology. Investors have become extremely savvy in keeping tabs on near-live energy market conditions. Using satellite ship tracking and aerial images of oilfields, ports and refineries, traders can monitor oil and gas production and transportation, enabling them to better understand supply and demand balances than was possible in previous decades. In this latest conflict, markets certainly responded rationally. The risk of a supply disruption increased, so prices did as well, but not excessively because there were significant doubts about Iran's actual ability or willingness to disrupt maritime activity over a long period of time. Another explanation for the limited price moves could be that producers in the region – again, rational actors – learned from previous conflicts and responded in kind by building alternative export routes and storage to limit the impact of any disruption in the Gulf. Saudi Arabia, the world's top oil exporter, producing around 9 million bpd, nearly a tenth of global demand, now has a crude pipeline running from the Gulf coast to the Red Sea port city of Yanbu in the west, which would have allowed it to bypass the Strait of Hormuz. The pipeline has capacity of 5 million bpd and could probably be expanded by another 2 million bpd. Additionally, the United Arab Emirates, another major OPEC and regional producer, with output of around 3.3 million bpd of crude, has a 1.5 million bpd pipeline linking its onshore oilfields to the Fujairah oil terminal that is east of the Strait of Hormuz. Both countries, as well as Kuwait and Iran, also have significant storage facilities in Asia and Europe that would allow them to continue supplying customers even through brief disruptions. Perhaps the most important reason for the world's diminishing concern over Mideast oil supply disruptions is the simple fact that a smaller percentage of the world's energy supplies now comes from the Middle East. In recent decades, oil production has surged in new basins such as the United States, Brazil, Guyana, Canada and even China. OPEC's share of global oil supply declined from over 50% in the 1970s to 37% in 2010 and further to 33% in 2023, according to the International Energy Agency, largely because of surge in shale oil production in the United States, the world's largest energy consumer. To be sure, the global oil market was well supplied going into the latest conflict, further alleviating concerns. Ultimately, therefore, the Israel-Iran war is further evidence that the link between Middle East politics and energy prices has loosened, perhaps permanently. So geopolitical risk may keep rising, but don't expect energy prices to follow suit. The opinions expressed here are those of the author, a columnist for Reuters. Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tabyour essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab
CNN
24-06-2025
- Business
- CNN
Why gasoline prices aren't tumbling along with sinking oil
Oil futures tumbled again Tuesday on hopes that the shaky ceasefire between Israel and Iran would reduce if not eliminate the risk any significant disruption to global energy markets. Gasoline futures fell, too. So when will you notice prices falling at the pump? It may be a while. Because gas prices didn't shoot significantly higher over the past two weeks after Israel and Iran began their recent hostilities, you probably won't notice any big savings anytime soon. The national average gasoline price stood at $3.12 on June 10 according to AAA, just before oil and gasoline prices started their climb on rising concerns about a conflict in the days before the fighting started between Israel and Iran. The so-called New York harbor prices for gasoline futures closed at a wholesale price of only $2.09. A barrel of Brent crude, the global benchmark for oil closed at $66.60 that day. Both wholesale gasoline and oil futures stared rising steadily June 11 and continued to climb through the early hours of trading this past Sunday night, after the US bombing of nuclear sites in Iran raised fears of a broader conflict. Brent Crude futures briefly topped $80 a barrel late Sunday. But throughout the day Monday as those fears of a wider conflict retreated and hopes for a cease fire increased, the price of oil started falling sharply. Oil Monday closed down 7% at $70.65 a barrel, while a so-called New York harbor prices for gasoline futures fell about 5% to a wholesale price of $2.22 a gallon. And the wholesale prices fell another 5% in midday trading Tuesday to a $2.09 price, essentially matching the price before the recent run-up. The AAA average retail price for a gallon of regular gasoline stood Monday at $3.22, based on a survey of gas stations conducted on Sunday, and it remains there in Tuesday's reading. But that means there was only a 3% rise in pump prices from June 10 to today's level, so there's not a lot of room for prices to fall to go back to pre-conflict levels. Tom Kloza, an independent oil and gasoline price expert, said he could see prices starting to decline a little bit in the coming days as stations take deliveries of cheaper wholesale gas. The seasonal pick-up in summer driving will stop prices from falling significantly in the coming weeks, he believes. But he does think that a glut of oil on global markets and strong US refining capacity could send prices down sharply through the rest of this year once the peak July demand wanes. 'It looks like we're well supplied, and that's bearish for prices,' he said. The strong supply has little to do with President Donald Trump's 'drill, baby, drill' call to increase production. Overall US production is roughly unchanged from this time last year and it's not likely to increase significantly at the current prices, Kloza said, especially with 50% tariffs on imported steel raising the cost of the pipes used in oil exploration. The price of oil futures did not spike as high as during some past global incidents, such as Russia's attack on Ukraine and the imposition of sanctions on Russia by western nations that followed. In that case Brent prices soared 44% from early January 2022 through early March of that year. But Kloza said there isn't as much speculative money in oil futures markets as there used to driving up prices in reaction to external events. 'That money is much more likely to go into crypto and to go into big tech today,' he said. 'There's only so much money to go around.'
The Independent
24-06-2025
- Business
- The Independent
What do the markets know about the Israel-Iran conflict that we don't?
If you want to know what is going to happen in the Israel- Iran conflict, follow the markets. Yesterday, the oil price rose a little bit, but not much, and everywhere else in the City and on Wall Street, there was a relative sense of relaxation. As the rest of us were worrying about escalation, there was a curious calm from those who you might assume would have been panicking the most. Today, following news of the Iran-Israel ceasefire, oil and gas prices fell. Then, when it appeared as though the truce might not last, they climbed again. The movements were not huge – certainly not of the magnitude we might expect with the outbreak of war in the Middle East, the world's prime energy supplier. Certainly, they are not embarking on the traditional rollercoaster, soaring and plunging on every development as they have done in past crises. So, what did the traders and their analysts know that we didn't? The temptation is to say they are deliberately remaining quiet, that they believe the fight will soon blow over and there is nothing seriously to worry about. Their algorithms and calculations are telling them to sit tight and not overreact. Well, not yet anyway. This really is a conflict which changes dramatically every hour or so; trying to keep up, or rather, ahead, is a fool's game. But the markets are reflecting a truth that cuts through the noisy, panicky narratives about a third world war. At present, there is no sign of a full-blown, protracted conflict. There are no troops on the ground and the action is confined to missile barrages generally aimed at military targets. It's for those drawn-out affairs that they employ ex-armed forces and defence strategists and circulate detailed predictions to their clients. That is when they discreetly use those with high-level political and diplomatic contacts to try and obtain inside knowledge. Also, it's when they harry those frontline war and foreign affairs reporters they know – and have made it their business to get to know – for any detail that might prove useful. There is no evidence of this occurring. The reality is that there are no troop and artillery build-ups, no significant urgent naval redeployments; there is no front line; and the specialist writers are similarly having to play catch-up. They, and the markets, are getting their information from the same sources as everyone else, from Donald Trump's social media posts, from Iranian and Israeli government statements. They are watching the rolling TV news, monitoring the same publicly available digital platforms as we all are. What sets them apart is that they are zooming into the details that many others may miss among the noise. Everything points to containment, with even the talk of imposing regime change appearing half-hearted. What they're eyeing nervously is the Strait of Hormuz. Any true sign that this key narrow waterway is to close will provoke mayhem. That's when we will see oil and gas start to go through the roof, equities begin to crash and gold embarking on a dizzying ascent. Another flashing warning sign is surging long-term bond yields. Again, they are flat. Gold, too, is unaffected. It is literally all quiet on the markets front – especially when you compare it to when Trump unleashed his tariffs blast and stock markets suffered their sharpest one-day falls since Covid: the S&P 500 shedding $5 trillion in stock market value in two days, overtaking a two-day loss of $3.3 trillion in March 2020. Again, there have been noises from Iran that they might shut the shipping route, but the markets are consoling themselves with the knowledge that the country worst affected by the blockage will be Iran itself, which is already suffering economically. And its allies, Russia and China, who buy most of its exports. Investors are clinging to the view that Trump does not want this war, that he certainly does not wish the US to get dragged in. He was elected on a promise to avoid battles in faraway lands and to go against that would count as a gross betrayal of his core Maga support. Similarly, they suspect that Israel does not have the stomach for something bigger, that it's exhausted by Gaza and did not waste any time in withdrawing from southern Lebanon. Israel dares not risk drawing in Iran's allies. Such as they are. Of course, there is an argument to say that even Trump's own advisers and officials do not have a clue as to what could happen next. The US bombing of the nuclear sites was hidden behind layers of subterfuge and only known in advance by a handful of his most trusted aides. Likewise, the precious nugget that Iran had signalled to Trump it was going to attack American bases beforehand to avoid casualties was kept back. Trump sprung that on the world via his Truth Social network, just as he did with the later claim that an agreement to end hostilities had been reached. When it comes to experts claiming to know anything, bankers and brokers are just as wary of falling for a lie designed to net someone a handsome profit as they are desperate to learn the truth. For now, though, their watch phrase is that UK trope, coincidentally a wartime instruction: Keep Calm and Carry On.
Bloomberg
23-06-2025
- Business
- Bloomberg
Iran Disruption Will Be Short Lived: Citi's Layton
Energy markets are watching the conflict within Iran, as Iran has made threats to close the waterway that could lead to an increase on oil prices. Citi Global Head of Commodities Research Max Layton believes Iranian disruption will be short lived. He speaks with Scarlet Fu on "Bloomberg Markets." (Source: Bloomberg)
