**Energy crisis: The Middle East truce does not solve the problem**
Despite the truce and the return of navigation to the Straits of Hormuz, the energy crisis is entering a long-term phase. Oil moves below $100 and gas below 50 euros per megawatt hour, but serious damage to Qatar's and Gulf countries' infrastructure limits supply. Europe faces a deficit in diesel and air fuel, dependent on over 40% of the Persian Gulf. In Greece the situation remains stable thanks to the diversification of supplies and the release of 2 million barrels from strategic reserves.
Analyticalally:
By Harry Floodopoulos
The achievement of a truce in the Middle East and the gradual return of navigation to the Straits of Hormuz initially created the impression that the energy crisis can be deescalating faster than the markets feared. The price decline confirmed this first reaction as oil now moves below $100 a barrel, while gas has retreated below 50 euros per megawatt hour.
However, behind this apparent de-escalation, data indicate that the crisis has not only not ended, but is entering a more complex and probably long-term phase. Markets may react directly to geopolitical events, but the real energy economy is affected by factors that are not so easily reversed.
The key element that differentiates the current situation is the extent of damage to the energy infrastructure of the region. During the conflict, critical production, extraction and refining facilities suffered significant blows.
Qatar’s natural gas production potential – the main supplier of the global LNG market – has been affected, while damage to export terminals and refineries in Gulf countries is recorded. Even if maritime safety is fully restored, the return of production to pre-crisis levels requires time, investment and a stable geopolitical environment.
This means that the energy supply will remain limited for a longer period than the markets originally estimated.
The "feeling" of de-escalation
The fall in prices, although significant, does not invalidate the fact that the energy system has already received a strong shock. Prices may have declined from extreme levels, however they remain higher than pre-crisis data, while volatility is still strong.
Traders and energy companies now incorporate increased geopolitical risk in their decisions, which maintains a "premium of uncertainty" in prices. At the same time, redirecting flows and changing trade routes are not reversed directly.
Deficit on critical fuels
At the same time, concerns about the adequacy of specific products, with diesel and air fuel peaking. Europe is heavily dependent on the Persian Gulf for over 40% of imports into diesel and jet fuel, which makes the market particularly vulnerable to disturbance.
Particularly in the air fuel market, the picture remains extremely tense. Despite the armistice and prospect of reopening Hormuz, market factors estimate it will take months to restore the balance in supply, as the region's refineries have been severely affected.
This development is already translated into increased costs for airlines, route cuts and cost shift to consumers, and corresponding pressures are expected in the diesel market, which is a critical fuel for transport and industry.
Structural changes in the market
The most crucial element is that the crisis accelerates deeper, structural changes in the energy market. The period of relative abundance and low prices seems to give way to a more fragmented and geopolitically vulnerable system.
Countries are increasingly turning to long-term contracts to secure supplies, strengthen strategic reserves and invest in energy self-sufficiency. At the same time, the LNG market risks remaining "tight" for a long time, with Europe constantly competing with Asia for available cargoes.
Effects on Europe and Greece
For Europe, the situation remains fragile, as low levels of gas reserves and the need to make up for winter keep the risk of new price turbulence.
In Greece, there is currently no question of fuel adequacy. The diversification of supply sources and the strong presence and flexibility of domestic refineries function as stability factors. In the same direction, the decision to release 2 million barrels from strategic reserves, which strengthens supply security and acts preventively against potential market disruptions, is also taking place.
A crisis that will last
The main conclusion is that the energy crisis does not end with the truce. Rather, it enters a phase where direct geopolitical tensions may retreat, but their consequences remain active.
Infrastructure damage, reduced production capacity and market rearrangement create a new environment in which energy prices will remain unstable.
