George Hay

The G7 is to release 100 mln barrels to curb high prices. Energy risks, and Washington’s role in the Iran war, were good reasons for European nations not to play ball. But Europe has been slow on releases, and giving some ground should help avoid a US diesel export ban.

Oil rose to $86 ​a barrel after the American president threatened a 20% ‌levy on cargoes transiting the Strait. The US once ruled out such fees entirely. Accepting the principle of tolls makes it easier for Iran to ​charge its own one, leaving the Hormuz route permanently ​pricier.

‘Defence-as-a-Service’ is more than SaaS with guns

Despite ​a blocked Strait ​of Hormuz, the fossil ⁠fuel costs ​about 50 euros per ​MWh in Europe and Asia, way cheaper than ​in the ​2022 Russian crisis. Lower EU ‌reliance ⁠on Gulf gas and Asian plan Bs explain why. ​But ​as ⁠spring becomes summer demand may ​rise – and so ​could ⁠prices.

Iran's grip ​on the ​oil bottleneck has seen at ⁠least one ​ship pay $2 mln to ​pass. Even if it charged a lower rate ​of $1 per barrel ​on half of prewar traffic, ‌the ⁠fee over 25 years in today's money is $54 bln. ​That’s ​close ⁠to the possible cost of ​new pipelines to ​bypass ⁠the strait.

Oil plunged to $94 a ​barrel after Washington and Tehran agreed a two-week ‌ceasefire. In a best-case scenario it could take months to restore traffic in the Strait of Hormuz. Even then Iranian tolls, ​restocking depleted reserves and fears of future disruption ​will push up prices.

Gulf conflict has pushed European and Asian liquefied natural gas ​prices higher, but not American ones. Those with lots of ‌US supply, like Shell and TotalEnergies, can make tidy trading margins. And $41 bln Venture Global, with a boatload of un-contracted LNG, has struck gold.

Doha’s GDP could sink ​13% in 2026, amid attacks that have taken out ‌17% of LNG capacity. Its local banks have faced big deposit outflows before. If Qatar has to cover lost revenue and liquidity, its $580 ​bln wealth fund can sell assets and its ​central bank can sell gold.

With the ​UAE alone hit by ⁠2,000 Iranian strikes ​in two weeks, ​regional hubs like Dubai need better ways ​to repel unmanned ​craft. Firms like Germany's ‌TYTAN ⁠and Ukraine's SkyFall could meet that demand. If more ​contracts ​allow ⁠them to scale, Europe’s ​security could benefit ​too.

Tehran’s strikes on the likes of ‌UAE, Bahrain and Qatar dent their appeal as a home for foreign money. If Iran implodes, overseas investors may ​go cool on the whole region. Even if ​that doesn't happen, the conflict could boost Saudi ⁠Arabia at the expense of its neighbours.