Oil falls back below 100 dollars due to pause in fighting

Tensions in the Middle East are easing somewhat again and that is immediately visible in the energy markets. Both oil and gas have fallen in price in recent days. Gas reached its highest point in 3.5 years last Friday, but has since fallen by 10%. Brent oil has meanwhile dropped back below the $100 per barrel mark. Energy prices have since the American-Israeli attack in Iran at the end of February been dominated by what is happening in the Middle East. After almost two weeks of daily attacks back and forth, the US stopped the attacks on Iran last weekend to make room for new peace talks. Iran in turn has carried out no more retaliatory actions in the region. That is clearly visible in the oil price. A barrel of Brent oil costs at the time of writing (Tuesday afternoon 28 July) $87.08. That is 13.5% less than last Thursday (23 July), when the oil price rose above $100 per barrel. That was the highest in more than two months. The current price is still a fifth above the level of early July, when the oil price had fallen to a level around $72 per barrel. DieselThe Dutch diesel price has fallen by 3.5% since the weekend and is now at €177.05 per 100 liters from 4,000 liters (LTO member price). Gas falls from highest price in 3.5 years The gas price is also moving downward again, after having risen sharply earlier due to the renewed increase in tensions in the Middle East. One fifth of globally traded LNG normally passes through the Strait of Hormuz. Although most of that LNG goes to Asia, global supply has become tighter because transport through the Strait of Hormuz has been restricted. Last Friday (24 July), at €63.58 per megawatt hour, the highest price since the Iran war, and also in 3.5 years, was reached. That means the gas price rose by more than half in one month time from 25 June, when €40.50 per MWh was on the board, to 57%. At the time of writing, the gas price stands at €57.48 per MWh. A decrease of 9.6% compared with four days earlier. Although the energy markets are reacting immediately to the pause in fighting, it remains uncertain how the situation will develop further. According to international media, the US is facing shortages of ammunition, although Washington denies this. Tehran in turn says it knows nothing about new peace talks, while President Trump has already threatened to resume the attacks. Meanwhile, Oman has proposed jointly managing the Strait of Hormuz in the region. Electricity The daily average of the electricity price fluctuated last week between €76.26 (27 July) and €132.21 per MWh (24 July).