Oil hovers around $104 and gas tops €80/MWh

The barrel hovers around $104 and gas is already past €80/MWh

Oil is trading at around $104 a barrel. With the Strait of Hormuz closed for months now, some argue that this price is not a warning: it's a bargain compared with what may be coming. Gas, meanwhile, has already topped €80 per megawatt hour and is hitting Europe well before crude does. The energy bill has become the true thermometer of the crisis, and the thermometer is running a fever.

Why $104 a barrel may be too low

The logic of supply and demand has broken down. With the Strait of Hormuz blocked for six months now, some argue that a barrel at $104 is far too cheap for the bottleneck the market is enduring. The reasoning is simple at heart: if crude has to travel longer and costlier routes, the price should reflect it more harshly than it currently does.

Gas is the one doing the real damage in Europe. Topping **€80 per megawatt hour** while oil seems contained paints an uncomfortable picture: the continent is paying its energy bill through the back door — heating and industry — before crude has even finished overflowing.

The coming winter and heating oil at €1.50

Heating cannot wait. Heating oil has settled at around **€1.50** and the question is no longer whether the bill will rise, but by how much. A cold winter at these prices turns every extra degree into a household debate over how far the thermostat can go down before you're genuinely cold.

Electricity, for now, is holding its ground. But the market keeps a wary eye on any gas increase, because the price of power ultimately drags along the cost of the gas burned to generate it. That's the trap: the barrel makes noise, but gas decides.

China and the United States would already be tapping their reserves

There is an explanation circulating that fits the timeline: China would have stockpiled a year and a half's worth of oil before the trouble erupted, and would now be consuming what it stored instead of buying. The United States would be doing the same with its own stocks. The result is a market that looks calm because two giants are emptying the cupboard.

When those reserves run out, the picture changes. The day China and the United States return to the market as buyers, the price will no longer have today's cushion. It is the most uncomfortable argument in the analysis: the current price does not measure scarcity, it measures the calm before the scarcity.

The hangover nobody is watching

Even if the conflict were resolved tomorrow, the crisis would not end. Damaged refineries and facilities take months to return to full capacity, and states and companies have to readjust to new demand and new prices. Fuel would stay expensive for months, perhaps a year, while what was broken gets repaired.

And then there are taxes. The governments now collecting more for every litre sold will not look kindly on that revenue deflating when the price falls. The fiscal hangover may last longer than the energy crisis itself.

Euribor and the mortgage to come

Energy doesn't stop at the petrol station. High oil fuels inflation, and inflation pushes the central bank to keep rates high. Euribor, already in uncomfortable territory, is the domestic translation of this whole mess: the mortgage of thousands of families rises as the barrel rises.

The scenario the market is sketching is not that of a passing scare. It is that of an energy crisis seeping into the shopping basket, the heating bill and the monthly loan payment. A cocktail that is already being served and whose duration nobody knows.

The most honest prediction is that oil will keep lurching while the reserves last. When they run out, we'll see whether the market was as calm as it seemed or was merely holding its breath.