Global energy markets appear to be in a bounded equilibrium.

When prices rose sharply, as they did last week on an escalation of the Iran war, President Donald Trump capitulated, showing a pain threshold in domestic fuel costs. When prices fall toward early‑year levels, Iran seeks to retain control of the Strait of Hormuz and hostilities resume. Brent crude ranged from $71 a barrel on July 1 to $101 a barrel on July 23.

The strait’s partial closure cuts global oil supply by roughly 20 %, and LNG by the same proportion, forcing prices up. Stockpiles fell from very high levels at the start of the year to normal in May, with a brief June rebound after a temporary reopening, but inventories are likely to keep falling.

In Europe, natural‑gas storage supplies only 25‑30 % of winter demand, and current levels are close to their lowest since 2011, heightening worries that a cold spell could deplete reserves and drive prices higher, potentially dragging inflation.

Central‑bank policy remains cautious. The ECB held rates at 2.25 % and signalled a meeting‑by‑meeting approach, while the BoE and the Fed, under chair Kevin Warsh, have offered no clear reaction function, leaving markets uncertain about future rate moves amid volatile energy prices.