Rising Middle East tensions push European gas, oil prices higher

Ongoing conflicts involving the United States, Israel, and Iran in the Middle East have driven European natural gas prices up, while international oil markets are also seeing upward movement.

On Thursday (March 5), April-delivery natural gas on the Dutch Futures Market rose more than 9 per cent to over €53 per megawatt-hour at 8:25am, after dipping below €50 the previous day. Prices had surged nearly 70 per cent over the preceding days.

Analysts say military actions by the US and Israel, coupled with Iran’s retaliatory measures, have disrupted the strategic Strait of Hormuz, a key energy transport route connecting the Persian Gulf and the Gulf of Oman. Reduced oil and gas output by several Gulf countries has further added uncertainty to global energy markets.

International crude oil has mirrored the trend, with European benchmark Brent crude for May delivery rising 3 per cent to $84.05 per barrel. Since the conflict escalated last weekend, Brent crude has gained nearly 16 per cent, briefly touching $85.12 per barrel on Tuesday—the highest level since July 2024.

Market analysts warn that if tensions persist, volatility in global energy markets is likely to intensify further.