The Wars In Iran And Ukraine Continue To Rage On. European Gas Prices Hit Their Highest Level In More Than Three Years.

European gas prices reached their highest level in more than 3 years as conflicts between Ukraine and Russia and in the Middle East continue.

The continent's benchmark wholesale gas price, the front-month Dutch TTF contract, climbed above €80 a megawatt-hour on Wednesday, the highest since January 2023, after climbing almost 7%. And demand is expected to rise as winter approaches.

Energy prices are climbing at the global level. Brent crude prices topped $100 on Wednesday as the U.S. and Iran kept trading strikes in the Strait of Hormuz and broader hostilities continued throughout the Middle East.

The U.S. Central Command (Centcom) said the latest escalation involved its forces destroying five Iranian tankers in retaliation for an attempted attack against a warship.

"The U.S. warship successfully evaded the attempted Iranian attacks and continued to patrol regional waters. No American personnel were harmed," Centcom added. "Iran has used the tankers as part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies. Iran has no means by which to defend these vessels."

Iran, in turn, had claimed that its revolutionary guard had struck two U.S. vessels, along with eight oil tankers in the Gulf. Forces added that the vessels had sought to transit the Strait of Hormuz through areas it designated as "forbidden and unsafe."

The Trump administration also escalated pressure on Iran through economic means, sanctioning over a dozen airlines.

The department noted in a statement that, overall, the "Treasury's Office of Foreign Assets Control (OFAC) sanctioned 36 targets for supporting Iran's aviation sector, which the regime uses to move weapons, personnel, and illicit cargo."

As hostilities continue, Goldman Sachs is now warning that a prolonged disruption in the region could send Brent crude as high as $120.

Goldman Sachs raised its oil price forecasts this week, citing the prospect of prolonged shipping disruptions. The bank now expects Brent to trade at $85 a barrel in December and WTI at $80, both $5 above its previous estimates. Its 2027 forecasts stand at $80 for Brent and $75 for WTI.

Those baseline projections remain below current prices, but the bank's downside supply scenario is considerably more severe. Goldman warned that Brent could reach or exceed $120 if Gulf production and exports remain significantly constrained, particularly if attacks on vessels in the Strait of Hormuz and Red Sea intensify.