Brent oil below $60, at the lowest since 2021
Energy markets accelerated their declines, influenced by optimism over peace talks between Russia and Ukraine. Gas has also returned to levels close to pre-war levels, although the hands of the clock cannot turn back, returning Moscow to its former role
For the energy markets, it is as if the war in Ukraine was already over, if it even never started: both oil and gas are trading around the same levels as before the Russian invasion. The fall in prices, encouraged by signs of a growing oversupply, has accelerated thanks to growing optimism about the possibility of a peace agreement soon between Moscow and Kiev.
Although there are still important knots to be untangled in the negotiations, Brent crude oil on Tuesday 16 slipped below the psychological threshold of 60 dollars per barrel: it had already done so briefly in May, but the prices - down by more than 2.5 per cent to 58.99 dollars - have now touched the lowest since February 2021. Those of Wti crude oil had already done so on Monday 15, and in the following session they slipped further, down to 55.16 dollars per barrel. Both benchmarks are down more than 20 per cent since the beginning of the year.
On the other hand, the price of gas has fallen by around 40% this year on the European markets: on Tuesday 11 at Ttf it traded below EUR 27 per Megawatt-hour, again around the lows since spring 2024 and very close to the levels of four years ago. A remarkable drop, if one considers the role Russia still played at that time as a supplier to the Old Continent. Today, the share of imports from Moscow has plummeted to around 10%, 'covered' mainly with LNG cargoes and partly with flows via the TurkStream pipeline to Central Europe.
On the energy front, the hands of the clock will not turn back with the end of the war, not even if the best possible agreement were to be signed, fair and satisfactory to all: a hypothesis that seems decidedly remote. European countries have changed sources of supply, relying much more than they used to on liquefied gas (more than half of which comes to us from the US). And within the EU, an agreement in principle was recently reached to also eliminate residual imports of Russian gas by 2027.
As far as oil is concerned, in January - putting an end to a hypocrisy that has lasted far too long - a ban on the import of fuels produced with Russian crude oil, which have so far arrived in the EU in significant volumes mainly from India and Turkey, will also come into effect.
