Oil and gas markets rose in September, primarily due to the resurgence of significant disruptions to hydrocarbon traffic in the Gulf. Red Sea flows have been constrained, while the substantial oil exports through the Strait of Hormuz remains fragile. In variation, the current rise in oil and gas prices exceeds the one recorded during the 2022 crisis, although in value, gas prices remain significantly lower than in 2022.
Oil
Once more, Brent crude prices again exceeded $100 per barrel in September, due to persistent tensions in the Gulf (particularly in the Red Sea), even as Gulf exports remained significant (with bypass pipelines and protected tanker convoys [trade shuttle] enabling over 70% of pre-crisis export levels since July). The resurgence of significant traffic disruptions has widened the spread between the Brent futures price and the physical (Dated Brent) price.
Gas
European spot gas prices (TTF) continue to rise for two main reasons:
1/ The lack of recovery in LNG flows from the Gulf (unlike oil),
2/ Heightened competition on the LNG market between Europe, which is rebuilding pre-winter stocks, and Asia, where demand remains high during the summer months.
Electricity
European wholesale electricity prices accelerated their rise over the summer due to successive heatwaves, increasing electricity demand. Meanwhile, nuclear power generation was hampered by rising temperatures and drought in some Central European countries and, to a lesser extent, in France. In this context, the reliance on more expensive resources (gas) has driven electricity prices higher.
