The conflict between Hamas and Israel is already influencing global energy markets. Natural gas has surged by about 44.6 percent since the conflict began on Saturday, October 7, shifting prices in European markets. In the European reference price for gas, Dutch TTF, the market moved to around 55.3 euros per megawatt hour. Brent crude rose last week, gaining roughly 7.7 percent to approach 91 dollars per barrel.
The spike in natural gas helps explain the jump in electricity costs, which have climbed to levels not seen since earlier this spring. For regulated tariff customers, the average electricity price is set to rise to roughly 141.05 euros per megawatt hour on Monday, October 16, marking an increase of about 6.7 percent from the previous Sunday and a jump of around 42 percent since the day the conflict began.
Israel’s latest evacuation deadline for northern Gaza ends as tensions along the Lebanese border rise
Based on hourly market data, the highest price anticipated for this Monday is about 220 euro per megawatt hour during the 19:00 to 20:00 window. Provisional data from the Iberian Energy Market Operator (OMIE) indicate the lowest price occurring between 04:00 and 05:00 with a value near 110.24 euro/MWh.
Natural gas plays a significant role in Spain’s electricity mix, contributing roughly 30 percent of generation. The overall energy mix relies on a combination of combined cycle plants and cogeneration, where biomass and other renewables also participate, according to data from Red Eléctrica de España (REE).
The price rise for this fuel comes as Israel ordered the shutdown of a natural gas field off its coast operated by Chevron for security reasons. Analysts also warn that a gas pipeline in Finland may not be fully operational until early 2024, a factor that could prolong the recent rally after a brief period of decline.
The Iberian exception does not apply
So far in October, the electricity market average sits around 115.7 euro/MWh, versus 143.08 euro/MWh recorded by the pool in the same period last October. September closed with an average of 103.3 euro/MWh, compared with 141.07 euro/MWh in September 2022, marking it as the most expensive month since February 2023.
The so‑called Iberian exception remains in force through December 31, following a pact among Spain, Portugal, and the European Commission. However, the mechanism has shown little impact on price dynamics since late February, in part because natural gas prices have not consistently met the thresholds required for its application. Along with the pool’s average, consumers benefiting from regulated tariffs or gas suppliers still face the need to cover the differences through adjustments, while the free market sees an indexed rate that has hovered at zero euro per megawatt hour for months.