Gulf Doubts Over US-Iran Peace Deal Keep Italy's Energy Costs in Limbo
Competing US and Iranian claims about the interim deal's terms have left Gulf producers sceptical it will hold, extending Italian and European gas pricing uncertainty.
Gulf states are openly questioning whether the US-Iran interim peace deal will survive. Foreign Policy reported on Tuesday (2026-06-23) that competing assertions by Washington and Tehran have left key Gulf producers worried the agreement lacks the durability to translate into lasting supply normalisation.8 For Italy, which has absorbed some of the steepest energy cost increases in Europe since the war disrupted Hormuz flows, the diplomatic uncertainty extends the planning horizon in which neither relief nor escalation can be reliably priced in.
Italy's energy-intensive industries have been among the loudest voices pressing for a resolution. Confindustria, the main Italian business lobby, warned in March (2026-03-25) that EU gas prices could almost triple if the Iran conflict extended to year-end — and that even a conflict ending by April would leave prices around 14% above year-earlier levels. The Strait of Hormuz, through which roughly 20% of global oil and gas is shipped, was central to that scenario.5
ICE Endex TTF front-month was at €41.67 per megawatt-hour on Wednesday (2026-06-24), well below the peak-risk scenarios Confindustria warned about. But the price reflects a market that has already priced some diplomatic progress — not a confirmed reopening.
The diplomatic calendar has repeatedly disappointed. Trump announced that a peace deal would be signed "this weekend" in Europe, with Vice President Vance expected to be present, on Thursday (2026-06-11).6 The Atlantic Council cautioned on Friday (2026-06-12) that the document was better described as a memorandum than a formal agreement — meaningful as a foundation, the analysis said, but not equivalent to the settled framework markets had begun to assume.7
For traders, that distinction has mattered. When Trump first signalled a deal was close, ICE Brent crude front-month fell 3.80% to around $63.52 a barrel and NYMEX WTI crude front-month dropped 4.12% to $60.58 in early European trade on Thursday (2026-05-14).3 Brent had recovered to $76.31 by Wednesday (2026-06-24), suggesting the market has repriced some of that optimism as the ceasefire dragged on without a binding settlement.
European gas tracked a similar path. TTF prices firmed modestly on Wednesday (2026-05-20) even after the US extended a two-week ceasefire, because Washington kept its blockade of Iranian ports in place. Traders read the continued port restrictions as evidence that Hormuz cargo flows would not normalise quickly even under a holding pattern.1
Washington has tried to soften the impact on European buyers. A senior Trump administration official said on Tuesday (2026-05-19) that the US was working to accelerate short-term oil and gas exports to Italy and other affected European countries.2 Whether those volumes can bridge a sustained shortfall depends heavily on how long the diplomatic uncertainty persists.
For Rome, the fiscal exposure is already visible. Carlo Stagnaro, research director at the Bruno Leoni Institute, told Montel in May that Italy's energy relief needs could run to EUR 2-3 billion against a public budget of around EUR 1.2 trillion — a manageable sum, he argued, if the government chose to act with targeted support rather than waiting for a European-level mechanism. Italian analysts pushed back against calls for Brussels to absorb the cost, saying Rome needed to reallocate existing spending rather than seek EU intervention.4
Gulf scepticism about the interim deal's longevity keeps that calculation open. If the framework frays and Hormuz restrictions remain in place into the third quarter, Confindustria's worst-case estimate — EU gas prices nearly tripling before year-end — shifts from scenario to live risk rather than planning assumption.