Expert analysis
In recent weeks, the global energy market has once again become strongly driven by geopolitical developments. The Iran war, which has been ongoing for more than two weeks, together with the rising military tensions in the Middle East, has introduced significant uncertainty into the oil and gas markets.
The attacks against Iran by the United States and Israel, along with the closure of the strategically important Strait of Hormuz, have once again highlighted that energy prices are influenced not only by supply and demand, but also significantly by geopolitical and infrastructure-related risks.
In this article, we present what is currently happening in the oil and gas markets, how the conflict is affecting Europe, and what developments are worth monitoring in the coming weeks.
Oil price increase: Brent near a four-year high
The tensions in the Middle East quickly appeared in the oil market. The global benchmark Brent crude rose to nearly 119,5 USD per barrel last week, which represents almost a four-year high.
Strait of Hormuz: a key point in global energy trade
One of the most critical points of the conflict in the Middle East is the Strait of Hormuz.
Around 20% of global oil trade passes through this strait, along with a significant share of LNG exports, particularly from Qatar and the United Arab Emirates. The closure of the strait therefore triggered an immediate reaction across global energy markets.
LNG shipments reacted especially sensitively to the situation, as exports originating from this region are crucial for the energy supply of both Europe and Asia.
The situation was further aggravated when production was suspended at the Ras Laffan Industrial City LNG complex in Qatar, and the shutdown had an immediate impact on the global gas market.
Several shipowners are currently unwilling to enter the region due to the increased military risks and significantly higher insurance costs. This means that even if a rapid political agreement were reached, LNG shipments may not normalize immediately.
European gas prices: TTF surge
The European benchmark TTF gas price rose to 69,5 EUR/MWh, which is the highest level since early 2023. Prices have since eased somewhat but remain elevated, currently trading around 52 EUR/MWh. Based on current market expectations, the TTF price may move within the 50–60 EUR/MWh range in the short term, with occasional price spikes.
Market participants are primarily trying to assess how quickly LNG trade from the Middle East can recover and how long the geopolitical risk premium will remain embedded in prices. A rapid de-escalation and the return of LNG shipments could bring a quick downward correction.
The biggest risk: operational problems in transport
According to experts, one of the most important lessons of the current situation is that the biggest problem may not necessarily be political, but operational in nature. Even if the conflict were to end in the near future, several factors could slow down normalization. This means that the restoration of physical supply chains could take several months.
What the market is watching now
Energy market participants are currently monitoring several key developments. They are watching whether shipping traffic resumes in the Strait of Hormuz area, whether production returns at the Ras Laffan Industrial City LNG complex, whether LNG tanker movements reappear from the region, and to what extent the geopolitical risk premium remains priced into oil and gas markets.
These factors could play a decisive role in energy market movements over the coming weeks.
What could reduce gas prices?
Several factors could ease market pressure, including milder weather that reduces gas demand, higher renewable energy generation, and strong Norwegian gas flows into Europe. These elements are currently partially offsetting geopolitical risks.
Electricity market: the impact of gas and CO₂ prices
The European electricity market continues to be influenced primarily by two factors: natural gas prices and the development of EU emission allowances (EUA).
In addition, meteorological conditions also play an important role in the short term, particularly the number of sunshine hours affecting solar power generation, the development of wind energy production, and hydrological conditions in the Balkan region.
A high number of sunshine hours and favorable hydropower conditions may reduce spot electricity prices in the short term.
Conclusion: energy has once again become a geopolitical market
The current situation once again demonstrates that energy markets are shaped not only by economic fundamentals but also by geopolitical events and physical infrastructure.
The European gas market may remain sensitive to developments in the Middle East in the short term. Until LNG shipments from the region resume steadily, the geopolitical premium may remain embedded in oil and gas prices.
The key question in the coming weeks will be how quickly maritime transport and LNG exports from the region return to normal, as this will largely determine the next major move in global energy markets.
Source: Montel Analytics; Greenergy Market
Analysis written by: Tóth Eszter Lilla
17.03.2026.