Energy Prices

Energy prices increased 37.3% month on month in March, following February’s 5.2% rise.

Energy prices in March rose at the sharpest pace in recent history, as the Iran war and the subsequent closure of the Strait of Hormuz choked off energy exports from the Middle East, raising prices for oil and LNG and their substitutes. Asian markets, in particular, have seen especially sharp increases in spot prices, as over 80% of the oil and LNG shipped via the Strait goes to the region. Middle Eastern countries, including Saudi Arabia, have slashed crude output, and Qatar has halted LNG production after suffering long-lasting damage to its facilities. Still, energy prices in March were about 30% below the peak reached in June 2022 after Russia’s invasion of Ukraine, with most analysts expecting the Strait to reopen in the coming months and for OPEC+ to subsequently ramp up output.