It's been a long time since oil and gas prices have fallen like this. The abrupt end of the 12-day war between Israel and Iran brought down quotes. There is enough oil in the world. As well as gas in Europe, where Russian LNG has replaced Ukrainian transit.
Oil
On Monday, world oil prices fell and did not rise again.
The value of the benchmark North Sea Brent has returned to its previous positions. Made a spurt from $ 77 to $ 67 per barrel.The beginning and end of the 12-day war between Israel and Iran turned out to be a surprise for the market, which feared the closure of the Strait of Hormuz, through which more than 20% of the world's oil passes.
"The market is now almost completely ignoring the geopolitical risk premiums of almost a week ago, as we return to a market based on fundamental factors," said Rystad analyst Janiv Shah.
In his opinion, the market will now follow the OPEC+ meeting on July 6. The participants of the transaction can continue the accelerated increase in production.
This has already been done by Iran, which accelerated exports to China during the war. That rose to a record 1.8 million barrels per day, according to Vortexa.
Prices have also been supported, rather than reduced, this week by numerous reports on oil reserves. Data from the US Energy Information Administration showed that crude oil and fuel inventories in the US declined, while refining activity and demand increased.
Gas
Gas prices in Europe have also fallen rapidly. During the week, deliveries for a month in advance from the TTF exchange fell from $ 494 to $ 409 per thousand cubic meters.
The market has not seen such a sharp drop, by almost 20%, for two years.Through the Strait of Hormuz, Europe provides only 10% of gas purchases from Qatar. However, its shutdown will force Asian countries to compete with Europe for American LNG. Therefore, the end of the war brought relief to the EU market.
At the same time, Eurostat data showed that the reduction of the EU's dependence on Russian gas is not going as fast as we would like in Brussels.
Record LNG supplies are underway in the EU. And Russian suppliers also had a hand in this. Eurostat has published the results of the first quarter of the year, according to which the import of Russian LNG to the countries The EU grew by 50% in January-March to 5.6 billion cubic meters.
Such a jump did not completely, but significantly compensated for the stop of Ukrainian transit. The total export of Russian gas to Europe for three months decreased by only 800 million cubic meters — to 9.3 billion cubic meters.
In this situation, the European Commission can only count on the fact that American and Qatari LNG projects will be introduced without the traditional delay and Brussels will not have to postpone the deadline for abandoning Russian gas again.
Along with gas, coal has also fallen in price this week. But not much. Deliveries for a month in advance from the Antwerp-Rotterdam-Amsterdam (ARA) hub dropped from $107 to $105 per ton in a week.