Energy Price Forecast Under the Impact of Iran Tensions: Romanian Industry Contracts as Brussels Anticipates a Long-Lasting Shock — NRG-IA

Macroeconomic Context: A Long-Lasting Energy Shock The energy market, including the natural gas and electricity sectors, is undergoing a profound reconfiguration, dictated by a convergence of geopolitical crises and internal structural vulnerabilities. Although consumers' immediate attention is often drawn to daily fluctuations at the pump, market fundamentals indicate a prolonged period of high costs. The European Commission has already issued a clear warning in this regard. In a recent statement to the Financial Times , the European Commissioner for Energy stressed that the European Union is preparing for a long-lasting energy shock. According to the analysis of European officials, member states must ensure they have the necessary resources to face a prolonged crisis, with extreme measures such as fuel rationing and the release of strategic reserves being taken into consideration. This European context sets the baseline forecast for natural gas and energy prices in Romania: volatility and price pressure will remain constant as the market attempts to absorb external shocks. Geopolitical Factors: The Strait of Hormuz – Frankfurt Axis One of the main factors currently influencing price forecasts is the escalation of tensions in the Middle East, particularly the dynamics involving Iran. The impact is not limited solely to oil quotes but propagates throughout the entire energy mix and into the monetary policies that govern investments in gas and energy infrastructure. François Villeroy de Galhau, a member of the Governing Council of the European Central Bank (ECB) and Governor of the Bank of France, warned that an interest rate hike could be the institution's next move. This decision is directly linked to inflationary pressures generated by energy costs. Thus, decisions affecting credit rates and, implicitly, the cost of financing for new energy projects (including gas extraction or grid development) are no longer made exclusively in Frankfurt; they are dictated by events in the Strait of Hormuz. A higher cost of capital means more expensive investments in the energy transition, costs that will ultimately be reflected in consumers' final bills. Domestic Implications: Industry Contraction and Record Prices in Bucharest The effects of this energy shock are already visible in Romania's real economy. A recent BCR analysis shows that the war in the Middle East is directly increasing domestic production costs, while demand stagnates. The health indicator of the manufacturing industry remains deep in contraction territory. Romanian factories are producing less and paying more for utilities. This dynamic is a classic example of "demand destruction" — high energy and natural gas prices force the industrial sector to reduce its activity, which can artificially balance supply and demand, but at a severe economic cost. On the residential segment, the situation is equally tense. A recent monthly study shows that Bucharest has reached the top of the European ranking for electricity prices. The Romanian capital records costs above the European average both in nominal terms and adjusted for Purchasing Power Standard (PPS). Given that natural gas is often the marginal fuel that sets the price on the regional electricity market, these record costs reflect systemic inefficiencies and constant pressure on the supply chain. Structural Vulnerabilities and Contrasts in the Fuel Market While electricity prices and macroeconomic challenges dominate the agenda, the domestic market also faces structural and grid integrity issues. A recent example is the detention of the mayor of Sânpetru de Câmpie, following searches in a case related to the use of clandestine installations connecting to the electrical grid (electricity theft). Such commercial losses from the grid are ultimately socialized and borne by all honest consumers through distribution tariffs. On the other hand, security of supply remains a topic of debate. Former President Traian Băsescu recently pointed out that Romania can avoid a fuel shortage, having alternative sources for crude oil purchases, but he drew attention to a major vulnerability: the closure of coal-fired power generation units. Reducing baseload capacities without replacing them with equivalent capacities (such as new natural gas or nuclear plants) increases reliance on imports and exposes the market to regional price volatility. Paradoxically, despite warnings about rationing at the European level, isolated price drops are recorded locally at the pump. Rompetrol recently reduced the price of gasoline by 32 bani per liter, reaching 8.59 lei, while Petrom maintains the cheapest diesel. However, these movements are short-term corrections, influenced by refinery stocks and local competition, and do not invalidate the forecast of rising energy costs in the medium and long term. Perspectives: Adapting to the New Cost Paradigm The forecast for the natural gas and broader energy market indicates a consolidation of…