Forty percent of the world's traded crude oil passes through the Strait of Hormuz. The price is determined by trade, which totals 40 million barrels a day out of a global demand of 102. If Iran were to do something militarily significant, the price of oil would rise above $250 a barrel and gasoline would rise toward 3 euros a liter. Europe imports a lot of liquefied natural gas from the Middle East, and this will have some impact on electricity and gas bills, with possible increases soon after months of normalization. From a low of 25 euros per megawatt hour, we have already risen to 32 euros per megawatt hour. The EU has been hit hard by the war in Ukraine, with gas prices rising from 20 to 300 euros per megawatt hour, while in the US they are hovering around $10. Not to mention that 15 million households in China switched from coal to gas heating in the past years. This is like a country like France suddenly entering the gas market. We Europeans depend on imports for 97 percent of our consumption.
Gas production costs no more than 5-10 €/MWh worldwide. A cap on the price of gas has been rejected by Germany, which wants to prevent any restriction on over-the-counter trading and derivatives. This trading is often the source of speculation. Suffice it to say that the EEX exchange in Leipzig, where many of the transactions, including those of the Dutch TTF, originate, is a flagship of German speculative finance, absorbing a lot of liquidity and generating wealth for the Dutsche Boerse, one of the world's leading financial operators. Any cap on the price of gas would remove liquidity from these markets. This is why Germany and the Netherlands are reluctant to impose a real cap on the price of gas.
The cost of CO2 emission permits in Europe is 70 euros, while the Chinese pay only 10 euros. The prices our companies pay for electricity are much higher than in China and the United States, and this affects our competitiveness. Nuclear power is the leading source of electricity generation in Europe, accounting for 23 percent, mainly thanks to France's 56 nuclear reactors. This is what Europe really needs to focus on if it really wants to reduce CO2 emissions and ensure economic growth.