Ceasefire falters: oil and gas become more expensive again

Oil and gas prices are rising again now that the ceasefire in the Middle East is faltering. After ten weeks, there is still no sign of a quick reopening of the Strait of Hormuz. In fact, Israel and the US would be considering removing highly enriched uranium from Iran after the peace talks have stalled again. Last week, the oil price fell from $114.44 per barrel on Monday 4 May to $100.06 on Thursday 7 May. However, the oil price is on the rise again. At the time of writing (Tuesday afternoon 12 May), the oil price stands at $107.62 per barrel. Diesel price remains reasonably stable While oil rose 8% in price since 7 May, diesel has increased by only a fraction. Diesel currently costs €169.30 per 100 liters from 4,000 liters (LTO member price). On Sunday, Tehran made a counterproposal to end the war on all fronts, including by Israel in Lebanon. Iran wants the lifting of the blockade of Iranian ports by the US and control over the Strait of Hormuz. In addition, Tehran demands an end to sanctions on Iranian oil and compensation for damage caused by the war. Trump responded on his own social media channel Truth Social that he found the proposal 'completely unacceptable'. This means the negotiations seem to be back to square one. Meanwhile, the ceasefire agreed at the beginning of April is wavering. A bulk carrier near Qatar was hit on Sunday and in recent days several Gulf states have reported intercepting drones fired from Iran. According to Trump, the ceasefire is hanging by a thread. News site Axios reports that Israel and the US would be considering removing highly enriched uranium from Iran and destroying nuclear facilities. Oil giants post profits The higher oil prices are proving highly profitable for the major oil giants. Saudi Aramco, the world's largest oil company, reported a first quarter profit more than a quarter higher than a year earlier. The Saudi company is partly offsetting the export restrictions through the Strait of Hormuz with a pipeline. Other oil companies such as Shell, TotalEnergies and BP also saw profits rise in the first quarter of this year. The Netherlands Authority for Consumers and Markets (ACM) also noted on Monday in its Fuel Price Monitor that unrest in the oil market due to the war in Iran is leading to higher profits for oil companies. The ACM has no indication that profits at petrol stations have increased. According to ACM chair Martijn Snoep, it is important to make transparent how crude oil price developments are passed through in the fuel chain and where profit margins have risen, because 'the increased fuel prices hit all companies and households directly in the wallet'. The monitor shows that the euro price of crude oil has risen by about 70% since March. It is not likely that the costs of oil production have risen to the same extent as prices. According to the authority, margins on diesel and kerosene appear to be higher than those on petrol. Norway reopens three closed gas fields The gas price has also risen by 8% since 7 May to €47.03 per MWh. European gas reserves are still low at 35% full. According to data from Gas Infrastructure Europe, the Dutch fill level is just under 12%. Over the past three years, the average fill level at this time was around 50% in the Netherlands and 56% in the EU. Market incentives to replenish gas reserves are lacking because of the high price. Energy Beheer Nederland (EBN) therefore has to ensure sufficient reserves in the Netherlands. In Norway, three gas fields that were closed in 1998 are being reopened. These are the gas fields Albuskjell, Vest Ekofisk and Tommeliten Gamma. This will not provide relief in the short term; first gas production is expected at the end of 2028. At peak production, an equivalent of 36,000 barrels of oil per day is expected to be produced. No major drops in average electricity price After spring weather, conditions are currently somewhat more changeable. Over the past week, there were no price drops visible in the daily average of the EPEX Spot, with the lowest average at €70.94 per MWh. According to the energy weather report from the National Energy Dashboard, more solar energy will be generated in the coming week than the average for this week over the past three years.