Aug 20, 2026
Oil prices rose to a more than three-week high today, with Brent climbing about 2.4% to $94/b. Key drivers, according to analysts and media reports, included President Trump’s threat of unprecedented economic warfare against Iran and its supporters, the UAE’s suspension of all financial ties with Tehran after alleged missile attacks, and continued Strait of Hormuz shipping disruptions amid stalled peace talks. Bank reports cited elevated supply risks and a higher geopolitical risk premium.
We see it differently: There is nothing new regarding Hormuz or Bab el-Mandeb. The real problem is a major loss of supply, as we discussed yesterday—a significant decline from the Americas and the Black Sea. At one point, the decline reached 8 mb/d.
Euro News: European Gas Prices Hit Highest Point Since March, Worse May Follow
Reuters: EU Not Concerned about Gas Supply or Storage Filling, Commission Says
Europe’s gas prices have surged about 120% in 2026, with Dutch TTF futures reaching about €63.7/MWh by mid-August—still far below the 2022 peak. A summer heatwave has boosted electricity demand while drought and heat curb hydro and nuclear output, forcing greater use of gas-fired plants and slowing storage refills. Additional pressures include extended Norwegian outages and a closed Strait of Hormuz. Storage stood at a record-low 57% in early August. Europe is more resilient than in 2022 but remains vulnerable to a cold winter, which could raise inflation and pressure the ECB.
Reuters reported that The European Commission stated there is no immediate concern about EU natural gas supplies, with storage currently at 62% of capacity. High gas prices following the US-Israeli war with Iran have deterred companies from filling storage ahead of winter. Current levels are below last year’s 74% at this time, per Gas Infrastructure Europe.
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