The blockade of the Strait of Ormuz has driven up the price of Brent, which is now 63% above its average for August. Spain imports almost all the crude it consumes, meaning the increase will be reflected in consumers' bills.
According to moncloa.com, Brent, the benchmark crude for Europe, is already trading at 63% above its August average following the blockade of the Strait of Ormuz. This surge has returned futures to May's highs.
The closure occurred at the peak of tensions between Iran and the United States, an episode that began in late February with Washington and Israel's offensive against Tehran. Additionally, Yemen's Houthis have intensified their attacks against Saudi Arabia, the world's largest oil producer.
In Europe, gas storage is at 77% of its maximum capacity, fifteen points below the usual average for this time of year. Community authorities are urging member states to accelerate purchases, with gas prices already doubling those of summer.
For Spain, the impact is felt through the transport of goods, the chemical industry, ceramics, and the agri-food sector, which operate with crude prices as a direct cost. In the electricity market, gas sets the price for the latest technology entering the auction, meaning an expensive barrel raises electricity costs even if renewables cover a significant portion of demand.
The Corporation of Strategic Reserves manages the minimum safety stocks of petroleum products, intended for supply emergencies and not for price control. According to available information, strategic reserves are at minimum levels.
Spain has a network of regasification plants among the largest in Europe, allowing it to receive liquefied gas from the United States, Algeria, and Nigeria. This capacity ensures supply but does not lower gas prices.
Unlike in 2022, when the Iberian mechanism capped gas prices for electricity generation, there is no possible cap for a blocked strait. What needs to be monitored now is the filling level of European storage and Brussels' response if gas prices continue to rise.
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