European energy markets experienced severe disruptions on Monday, with natural gas prices soaring by up to 30% at the benchmark Dutch TTF hub. The price per megawatt-hour reached 69.5 euros, equivalent to about 80 dollars, amid growing fears of a collapse in global supply chains due to ongoing military operations against Iran.
Economic sources reported that this insane surge will inevitably lead to immense inflationary pressures on consumers in the Old Continent, especially with the heavy reliance on gas for electricity generation. Despite a slight decline in evening trading, concern still dominates major industrial sectors that fear a long-term interruption of supplies.
In the oil market, prices exceeded the 117 dollar per barrel mark for the first time since the summer of 2022, driven by the near-total halt of navigation through the strategic Strait of Hormuz. Field reports indicate hundreds of ships and oil tankers piling up on both sides of the strait, fearing direct military targeting amidst unprecedented security tensions.
Ibrahim Jabari, an advisor to the Commander-in-Chief of the Iranian Revolutionary Guard Corps, explicitly announced that the strait has become a military exclusion zone, warning that any attempt to cross would be met with a decisive response. This threat is a devastating blow to the global economy, as approximately 20 million barrels of oil per day passed through this waterway before the outbreak of hostilities.
These economic developments come on the tenth day of the military aggression launched by the United States and Israel under the names 'Epic Fury' and 'Lion's Roar' operations. Intensive airstrikes, involving B-2 and F-35 stealth bombers, have resulted in the deaths of over 1332 people in Iran, including Supreme Leader Ali Khamenei.
For its part, Tehran continues its military responses by launching hundreds of ballistic missiles and drones towards Israeli territory and American bases in the region. These attacks have led to the deaths of 13 Israelis and injuries to over two thousand others, in addition to the deaths of 6 American soldiers and injuries to 18 in attacks targeting Washington's interests in neighboring countries.
On the ground, Iranian attacks targeted vital facilities in the Arabian Gulf states, Iraq, and Jordan, sparking a widespread international condemnation demanding a halt to the escalation. Previous reports confirm that Iran used more than 1600 drones and 500 missiles to target civilian objects and energy facilities around Dubai Airport and other Gulf cities.
Domestically in Israel, economic reports revealed a severe budget deficit, with weekly losses reaching approximately 9.4 billion shekels due to the disruption of productive sectors and the call-up of 100,000 reserve soldiers. Washington also faces criticism in Congress over the exorbitant cost of the war, reaching one billion dollars per day, amidst accusations of exceeding war powers legislation.
Observers believe that this military explosion came at a time when nuclear negotiations were making tangible progress, recalling scenarios of overturning negotiation tables. Global markets are preparing for further price shocks if the closure of the Strait of Hormuz continues and diplomatic efforts fail to contain the conflict, which has begun to expand to include multiple fronts.
The Strait of Hormuz is completely closed, and any ships attempting to cross it will be subject to direct attack.
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Sharp Jump in European Gas Prices as War on Iran Continues and Strait of Hormuz Closes