The number of forward contracts on the U.S./Iran conflict has increased by more than a month

European forward power contracts hit multi-month highs 'on Tuesday. They tracked higher natural gas prices and oil as the U.S. - Iran conflict intensified following the 'Tehran targeting of ships passing through the Strait of Hormuz. Some energy infrastructures were closed.

Around 20% of all liquefied gas in the world transits the Strait of Hormuz. Traders fear that a suspension or complete closure would lead to a global increase in competition and higher prices for other gas sources. Iranian officials have vowed that the Strait of Hormuz will be closed, but U.S. Central Command has said it's not, Fox News reported.

Ajay Parmar, consultant at ICIS, says that if we have a long-term war and the Strait is out of service for a longer period of time, all countries will be competing to get every "incremental" barrel of oil. This could push oil prices up into triple digits. Global energy prices rose Monday as a result of the closures of oil and LNG infrastructure, including Qatar's suspension of LNG production. At 1232 GMT, the German baseload contract for the year ahead was up 12.1% to 90.25 euros (104.73 dollars) per megawatt-hour. It had previously reached 91.30 euro/MWh as its highest level since 25 June.

The equivalent French price increased 15.3%, to?60.2 Euros/MWh. It had previously reached 60.50 Euros/MWh at its highest level since September 8. The equivalent French price rose 15.3% to?60.2 euros/MWh after reaching 60.50 euros/MWh, its highest since September 8.

Contracts on the spot side rose due to an?expected decrease in wind energy supply.

LSEG data show that the German day-ahead power contract has increased by 29.2%, to 134.75 Euros/MWh.

The French equivalent contract increased by 15.5% to 67 euros/MWh.

(source: Reuters)