Any potential disruption from Iran now seems contained, and OPEC’s steady rise in exports for three consecutive months, along with available spare capacity, has kept oil prices stable. Israel, notably, has avoided targeting oil and gas infrastructure. That restraint has helped contain the conflict geographically within Iran.
Gas Market Disruptions
Israel’s shutdown of the Leviathan field has caused a steep drop in gas exports. While flows to Jordan have just resumed, Egypt’s gas supplies have nearly dried up. With summer looming, the country faces blackouts. To avoid them, Egypt is rushing to deploy floating storage and regasification units (FSRUs), has committed to LNG imports, and is burning heavy fuel oil to sustain power generation - an emergency response to a worsening energy crunch. The Israeli energy ministry has said there’s no timeline for resuming exports and that it’s up to the military, making the situation highly uncertain. Meanwhile, in Europe, the TTF gas price has climbed from under €35 to over €41 per megawatt-hour, a 17% increase, closely mirroring the uptick in oil. Since gas prices drive electricity costs, the effects are rippling through the continent’s power sector. And if Qatar continues delaying LNG shipments through the Strait of Hormuz, prices may spike further. There’s no spare LNG capacity sitting idle, and it's not easily stored.
Europe’s Foreign Policy Paralysis
Europe remains weak and divided. There's no unified foreign policy or meaningful leadership. Germany, for instance, has yet to project clear direction under its new chancellor. The European Commission functions more as a bureaucracy than a political force, with key decisions still controlled by national capitals that rarely agree. Disagreements over Israel amplify this fragmentation. The scheduled meeting today in Geneva between UK, German, French and Iranian officials, is low-level and unlikely to yield meaningful results.