No lasting peace, but towards less war
The current negotiations are far from bringing peace, but the markets have calmed down. Unless there is more escalation, the world will have to go on with a higher price level and lower economic growth, but the intensive phase is over for now.
| February 27th | June 27th | |
| Brent crude oil | 71,32 US$ | 71,99 US$ |
| Gas (TTF 1 month) | 31,51 € | 41,48 € (July) |
Brent oil is almost at the level before the attack. What has changed is reduced refinery capacity, as well in Russia as in the Middle East. Lack in capacity eg. for air kerosene which is up 57 % since February is counterbalanced by lower demand.
Gas is still 10 € higher than in February, but here long term contracts might dampen the effect, also it looks for at least a partial replacement of Middle East LPG with US LPG. Venezuela is pumping up its production under US guidance, which will help the European markets indirectly.
This will be the last update on this website in the current series. We will continue to monitor and report on actual movements if it seems useful.
Companies need to change their mindset to adapt to permanent insecurity
In the recent ICC podcast “How to build a resilient trade strategy”, Joachim de Vos, professor for scenario planning at the University of Ghent explains de new challenges. Companies need to rely less on experience and monitor daily all relevant changes, shorten their decision cycle and focus less on strategy, but more on short term tactics.
He explained this on the recent example of Tesla vs. the rest of the industry in the recent chip crisis. When other manufacturers shortened their orders to chip producers, causing in the end a bottle neck in deliveries when the business took up again, Tesla reprogrammed their electronics to use common instead of specialized chips – which gave them a huge advantage and saved millions afterwards. (Podcast link here.)
Venezuela’s oil exports rose in May, its third consecutive month of increase, fueled by more cargoes to the US, India and Europe. Output is expected to grow 22 % from 2025 with potential for more.
Cost increase expected for
- Fertilizer
- Plastic products
- Rubber
- Aluminum
- Helium
- Sulphur
- Computer chips
- Wheat
- Fruits and vegetables
- Air fares
ECB has created two scenarios (Source):
- Adverse scenario: assumes that the shock intensifies but its duration is relatively short, containing its propagation through the economy. Relative to the baseline, annual inflation moves almost one percentage point higher this year but falls back steeply by 2028, as indirect and second-round effects are outweighed by a large energy-related base effect. Growth would be somewhat lower in 2026 and 2027, before recovering in 2028.
- Severe scenario: assumes greater intensity, longer duration and broader, more persistent propagation. Relative to the baseline, annual inflation would be significantly higher across the horizon – by almost three percentage points in 2027 – and would not return to target within the projection period. Growth would be notably weaker in 2026 and 2027, by almost one percentage point cumulatively, before rebounding in 2028.
See also the BMBC article: The Strait of Hormuz Crisis: What Companies Must Do Now and what it means for Belgium and North Macedonia
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