Global energy markets faced renewed pressure Friday as Brent crude climbed above $112 a barrel and European natural gas prices hovered near €100 per megawatt-hour, amid growing concerns over a possible escalation of the US-Iran conflict and Europe’s ability to secure sufficient energy supplies ahead of winter.
Brent futures for December delivery rose 1.49% to $116.59 a barrel on Friday, while the January contract reached $112.51. The international oil benchmark was heading for a monthly gain of nearly 13%, reflecting continuing disruptions to Middle Eastern energy supplies and fears of renewed American military operations against Iran.
European benchmark natural gas prices briefly surpassed €100 per megawatt-hour earlier this week, reaching their highest level since December 2022. Prices have almost tripled since the beginning of the Iran war in February, increasing pressure on households, businesses and European governments already confronting rising energy costs.
Iran tensions push oil prices higher despite diplomatic efforts
Oil prices rose following reports that Admiral Brad Cooper, the senior American commander responsible for the Middle East, briefed President Donald Trump on military options for renewed operations against Iran. The administration has also warned regional allies to prepare for potential military action after the November 3 US midterm elections, although no final decision has been announced.
The security situation in the Strait of Hormuz remains particularly significant. On Friday, maritime authorities reported an attack on a tanker involving explosive devices attached to a small boat, while renewed Houthi attacks against Saudi infrastructure increased concerns about regional supply disruptions. The strait normally carries approximately one-fifth of global oil consumption, making any prolonged disruption a major risk for international energy markets.
At the same time, diplomatic efforts have introduced uncertainty into oil trading. US Vice President JD Vance sent a letter to Iranian security official Mohsen Rezaei, reportedly exploring the possibility of renewed negotiations. Trump subsequently characterized the communication as concerning medical supplies rather than peace talks.
Europe faces winter with low gas reserves and rising costs
Europe’s energy situation has become increasingly difficult as liquefied natural gas shipments from the Persian Gulf remain constrained and storage facilities enter the heating season below historical averages.
According to European energy data, storage facilities were approximately 75% full in late October, compared with 83% a year earlier. The Dutch TTF benchmark briefly reached €100.95 per megawatt-hour Wednesday, while prices have increased approximately 39% during October.
The European Union Agency for the Cooperation of Energy Regulators estimates that the conflict has already increased Europe’s gas import bill by between €18 billion and €33 billion. Reduced deliveries from Qatar have intensified reliance on American LNG, while European buyers face increasing competition from Asian importers.
Norwegian energy company Equinor has warned that a particularly cold winter could trigger another sharp increase in prices as inventories decline and competition for available LNG cargoes intensifies. European Energy Commissioner Dan Jørgensen described the situation as serious, emphasizing that affordability is becoming as important as physical supply security.
EU energy ministers met Thursday to discuss emergency measures, including refinery output, electricity taxation and ways to reduce costs for households and industry. Meanwhile, European authorities are examining additional LNG supply arrangements and measures to improve energy efficiency.
Market analysts expect volatility to persist as long as the conflict continues. Even if hostilities subside, replenishing European storage reserves and restoring disrupted supply chains could keep energy prices elevated well into 2027.
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