DEC 15 | From Escalation to Energy Shock: Repricing of Global Oil and Gas Risk

Authors: Prof. Konstantinos Andriosopoulos, Georgia Giannakidou, Ilias Tsopelas, Eleni Ntemou

* This publication reflects the research and analysis of its authors. It does not necessarily reflect the position of the Center on Global Energy Policy. The piece may be subject to further revision.

The latest geopolitical events have moved energy markets from political signaling to structural risk pricing, with the Strait of Hormuz emerging as the central vulnerability. While oil prices such as Brent have reacted moderately, supported by spare capacity, strategic reserves, and partial pipeline bypass options, natural gas markets have shown far greater sensitivity. Around 20% of global LNG trade transits Hormuz, with exports heavily concentrated in Qatar and the UAE, and overwhelmingly directed toward Asia. Unlike oil, LNG lacks rerouting flexibility and meaningful storage buffers, making even perceived transit risks enough to trigger sharp price spikes—evident in the surge of European TTF gas prices in early March 2026. The episode underscores a critical distinction: oil faces volatility, but gas faces structural fragility in an increasingly infrastructure-dependent energy system.

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