The wholesale electricity market is heading toward what could become the second most expensive winter since 2010, even if the price were to drop to 112 euros per megawatt-hour, that is, 27 percent less than the current quotation, thanks to the de-escalation of the conflict between the United States and Iran. From the consultancy Tempos Energía they warn that this figure "would continue not to be cheap" because, although the easing would reduce the cost, "it would not bring the market back to the situation before the war."
The managing director of Tempos Energía, Antonio Aceituno, has stressed that the price of electricity is "especially high" in Spain due to the lack of cheap technologies. "The absence of a renewable of high relevance such as wind power causes hours in which electricity would be almost free to end up costing almost 190 euros, since that gap is covered by combined-cycle plants." "Seven out of eight hours there are gas plants running, so it can be said that today the light is gas, and natural gas is worth today three times what it was a year ago," he added.
To this rise in costs are added other factors, such as the shutdown of a nuclear reactor, the cut in the flow of electricity coming from France, and the increase in cost in the evening hours due to the absence of solar generation. This succession of gaps in supply increases "even more" dependence on gas, whose price is much higher than in previous years and has become "the variable that sets the floor at present," according to the expert.
Behavior of electricity futures
In the field of electricity futures, the key reference continues to be gas, which closed at 85.5 euros, more than eighteen below its recent high. At the end of October it crossed, for the first time since 2022, the barrier of one hundred euros; however, in barely five sessions it corrected more than half of the increase accumulated in one month. Even so, it continues to be worth more than two and a half times what it was a year ago.
For Aceituno, this limited correction is explained because "what has come out of the price is fear, since an attack on Iran was expected after the American elections and instead diplomacy arrived." However, the drop has not been bigger because "through Ormuz fewer than one third of the January methaners pass, which means that the ships have not returned."
The person in charge of Tempos details that "without those ships, the ground is marked by some European reserves that are ten points emptier than a year ago". "What is missing will arrive by ship, and the ship will go to whoever pays the most." Even so, the price of gas will have a cap set by European demand, which consumes more than a fifth less than in 2022 and, Aceituno recalls, "was staged during the two days on which gas closed above one hundred euros, since the next day it was already below."
At the same time, January-March electricity futures stand at 153.10 euros, twelve more than on October 20 with the same level of gas. Spring, at 85 euros, is paid at more than double than a year ago despite the moderation of gas, while summer contracts have marked highs on sixteen occasions in six weeks. Next year's winter is trading 33 euros below the current one. In a broader perspective, all of 2027 is negotiated at 120 euros, double that of June, and 2028, at 70 euros, had the same price as 2027 on New Year's Eve, but today they are separated by fifty euros.
A Brent still under geopolitical pressure
As for crude oil, Brent recorded a sharp correction in the first three sessions of November, falling from 120.15 to 91.84 dollars per barrel, a drop of 28.31 dollars, 23.56 percent. Despite this decline, it maintains a risk premium of between 20 and 25 dollars per barrel and maritime traffic remains tense, since at least five tankers have reported incidents in the Persian Gulf in the first days of the month.
The market assumes that there will not be an immediate offensive, but transit through the Gulf continues to be "just as dangerous". This balance between an "offensive that doesn't arrive and a risk that doesn't go away" is the basis of the scenarios handled by Tempos Energía. In the base scenario, Brent would fluctuate between 90 and 105 dollars per barrel, without a definitive agreement, without a large-scale offensive and with limited attacks such as the one recorded on the Iranian island of Qeshm.
In a bullish scenario, a possible U.S. attack order before the new Congress takes office in January would drive the price up to a range of between 115 and 135 dollars per barrel. The market would return to the September and October average, 119.04 dollars per barrel, and at the upper end it would be set at just over three dollars from the 2026 high, the 138.21 dollars per barrel of April 7.
As an alternative, the consulting firm considers a bearish scenario linked to a possible Qatari agreement that would allow Iranian crude to enter the market and eliminate the risk premium. With the lifting of the blockade, the presence of inspectors at nuclear facilities, and the reopening of the strait, Brent would move between 78 and 90 dollars per barrel. Despite this, Aceituno recalls that "we would not go back to the barrel of before the war, which in January and February 2026 averaged 68.69 dollars per barrel and even the floor of that range would remain 14 percent above".