THE energy prices are rising again due to tensions in the Middle East. The Brentthe reference oil for the European market, reached 78 dollars a barrel in five days, while the Wti has exceeded 75 dollars a barrel.
Energy prices are rising
This week, energy prices returned to their early September levels due to the widening conflict in the Middle East and threats to Iranian oil infrastructure by the USA and Israel.
If the values are still far from the peak reached last April (91 dollars a barrel), during the last week there has been a significant jump in prices. An increase in crude oil of 10% is calculated which recovers all the declines of the last month. Brent, in particular, it has passed from 71 to 78 dollars a barrel within 5 days. The US WTI grew to over 75 dollars a barrel.
The current scenario presents a double criticality: on the one hand, it fuels the company’s coffers Russiaindirectly financing the conflict in Ukraine; on the other, it weighs on the pockets of Italians, forced to face a further increase in costs.
The Government’s decision to increase excise duties on diesel, in this context, could further amplify the negative effects on families’ spending capacity. Estimates speak of an increase in annual spending for motorists between 2 and 3 billion.
However, the trend in energy prices also influences the gas market. Geopolitical tensions, in particular the attack on the Israeli platform and the war in Ukraine, are negatively influencing this market, so much so that prices have reached levels similar to those at the end of August.
Although they are lower than the historical highs reached immediately after Russia’s invasion of Ukraine (over 300 euros), current prices, equal to approximately 40 eurosexceed the average of the years before the conflict by almost double.
The possible interruption of oil supply
According to the experts of Generali Investment, the near-term risk could be oil supply disruption, which “would have the potential to significantly increase oil prices due to supply concerns.”
The Israeli attacks to Iranian oil infrastructure and the increase in the actions of Houthis in the Red Sea could trigger an energy crisis. In an extreme scenario, the closure of the Strait of Hormuz by theIrancould cause a further reduction in crude oil exports, with serious repercussions on the global economy.
Oil prices open today at levels significantly lower than those recorded a year ago following the attack Hamas to Israel. If at the time prices were close to 100 dollars a barrel, they are currently around 70 dollarsaffected by an economic context characterized by weak global demand and a phase of slowdown in the Chinese economy.
As he warns Thomas Hempell, Head of Macro & Market Research at Generali Investments, the growth in oil prices would have a knock-on impact on inflation: “The increase in oil and energy prices could reignite concerns about inflation and slow down further normalization of monetary policy. Not surprisingly, recent tensions have already pushed oil prices higher, extending the recovery started by Chinese stimulus announcements.”
