Battery revenues rise “dramatically” amid Iran war – analysts — montelnews.com; involving Iran, Europe, Natural Gas, ...

UK battery storage revenues double since Iran strikes as European power volatility surges Energy storage operators are capitalizing on price swings triggered by Middle East supply disruptions that have pushed European gas toward forecasted highs. Battery storage revenues in the UK have doubled since late February following the US and Israeli strikes on Iran, according to Montel analysts. The surge reflects intensified volatility in European power and gas markets as the war in the Middle East disrupts energy flows through the Strait of Hormuz and forces traders to price in extended supply risk. The revenue jump underscores how asset owners with flexible generation capacity are capturing value from extreme intraday and day-ahead price swings. Battery operators profit by charging during low-price periods and discharging when power demand spikes or supply tightens, a strategy that becomes lucrative when markets experience the kind of volatility now gripping Europe. The war has created precisely those conditions as gas prices whipsaw on conflicting signals about US-Iran negotiations and the duration of shipping disruptions. European benchmark TTF gas prices have climbed sharply in recent weeks, with one analyst forecasting a 70 percent rise to EUR 70 per megawatt-hour by May or June. That projection, made in mid-April when the contract traded around EUR 41 per megawatt-hour, anticipated persistent disruption from the Iran conflict. By late April, TTF prices had already risen 3 percent in a single session as US-Iran peace talks stalled, dampening expectations for a quick resumption of LNG flows from the Persian Gulf. Natural gas prices globally have soared amid fears of prolonged disruption to energy flows through the Strait of Hormuz. Brent crude traded at USD 111.28 per barrel in mid-May, up nearly 2 percent intraday, while WTI gained 2.3 percent to around USD 104.21. The price action reflects broader uncertainty about Middle East supply, with around 25 percent of Europe's total gas supply coming from LNG, much of it historically transiting through or originating near the conflict zone. The war has created what analysts describe as extremely difficult second-quarter conditions for European gas markets. Supply challenges are mounting as the conflict persists, with Equinor warning that Europe will struggle to refill depleted inventories to target levels before winter. Gas storage across the continent currently stands at just 34 percent full, well below the 80 percent threshold needed for seasonal security. The gap between current levels and winter targets is widening the basis between prompt and forward contracts, amplifying the very volatility that battery operators are exploiting. Oil markets have experienced sharp weekly swings as traders struggle to price the outlook. Prices headed for a 7 percent weekly loss in early May as conflicting signals emerged from US-Iran negotiations, even as attacks continued in the region. The whipsaw pattern has extended to refined products, with European spot premiums for jet fuel falling to their lowest since the conflict began, down to a USD 99 per metric ton premium over ICE gasoil futures. The energy disruption is also accelerating geopolitical realignments. Russian President Vladimir Putin traveled to Beijing this week for talks with Chinese President Xi Jinping aimed at finalizing the long-delayed Power of Siberia 2 gas pipeline. The proposed project would transport 50 billion cubic meters of natural gas annually from Russia's Yamal fields through Mongolia into China. Moscow is leveraging European supply anxiety to press for contract terms, though analysts note Russia enters the negotiations as the junior partner, now relying on China for more than 90 percent of its imported technology. US LNG exporters are separately asking the European Union to delay enforcement of methane emissions rules until at least 2028, arguing the regulations are creating uncertainty as Europe scrambles for supply alternatives. The request highlights tension between Europe's climate commitments and its immediate energy security needs as Middle East supply remains offline. The key uncertainty is how long the Iran conflict will constrain flows through Hormuz and whether US-Iran talks can produce a settlement that reopens supply routes. Until then, European gas markets face sustained tightness heading into the critical summer injection season. Battery operators will continue benefiting from volatility, but the underlying supply deficit poses broader risks to industrial demand and economic growth if prices remain elevated through the third quarter. The next signal to watch is whether TTF prices sustain levels near EUR 70 per megawatt-hour, confirming the bearish supply outlook, or retreat if diplomatic progress emerges.