The US-Iran conflict disrupts the world, will an energy crisis reoccur?

The United States and Israel launched a surprise attack on Iran, targeting and assassinating Iran’s top religious leader, Khamenei, causing Iran to fall into a power vacuum. Over the past week, Iran has begun attacking nearby U.S. allies with drones and short-range missiles, and symbolically and procedurally, it has started to blockade the Strait of Hormuz, a vital maritime oil and LNG shipping route in the Middle East. Restrictions on Iran’s overall war capabilities (drones/short-range missiles) have become a priority on Western countries’ agendas. Chaos is expected to continue for some time.

In wartime, energy infrastructure is naturally exposed and becomes vulnerable targets. Qatar, the world’s largest LNG exporter, has shut down its export facilities for the first time in 30 years. Uncertainty about the future has directly impacted various energy markets. Over the past week, international oil prices have risen by more than 15%, and natural gas prices in Europe and Asia-Pacific have surged, sometimes exceeding 30% in a single day (though they later pulled back). European natural gas futures (TTF) have reached €60/MWh, doubling since the coldest month of January. Coal, which is further down the supply chain, has also risen by over 10% in the highly liquid U.S. market, surpassing $120 per ton, breaking the stable range of the past two years and reaching a new high for 2024. The Australian coal index (ICE Newcastle Coal) has experienced a similar increase.

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