The escalation of the conflict between Israel and Iran may have a major impact on global energy prices. Oil and gas prices rose sharply due to concerns about possible disruptions in supplies from the Gulf region. The situation escalated further when the US launched air strikes against Iranian targets on 22 June. Iran has since threatened to close the strategically important Strait of Hormuz, although this has been announced several times previously without actually happening. However, even without a (complete) closure of the narrow strait Iran could exacerbate nervousness in the oil and gas markets, for instance by attacking ships.
Although oil prices have risen sharply since the conflict, further price increases above USD 80-82/barrel level are currently finding resistance from a broad market. Asian oil demand is relatively weak, while OPEC+ also has spare capacity to bring to market. A break of the resistance levels is possible, although it will require substantial trading volumes.
Potential supply disruptions of LNG due to the turmoil in the Middle East come amid a tight gas market. The nervousness will not make filling European gas supplies any easier. Moreover, the European Commission (EC) has created upward price pressure with its plan to phase out Russian gas. Developments around trade agreements with the US and extreme weather patterns in the EU or Asia could also cause price movements in the coming period.