Oil and gas slide in early May as US–Iran deal hopes cool prices, while EU carbon stays supported

Energy markets opened May with a clear split between cooling oil and gas prices and steadier support in carbon. During the first week of May, expectations around a possible United States–Iran agreement helped drive a bearish turn in both crude and European gas, even as geopolitical risks continued to flare intermittently.

Brent front-month: peak then correction

ICE Brent crude oil futures for the Front Month contract reached their weekly peak settlement price of $114.44 per barrel on Monday, May 4. Prices then entered a downward correction through the remainder of the week, declining steadily to a weekly low of $100.06/bbl on Thursday, May 7.

By Friday, May 8, Brent closed slightly higher at $101.29/bbl. Even with that late rebound, the level was still 6.4% lower than the previous Friday, according to AleaSoft Energy Forecasting data.

Geopolitics vs deal expectations

The week’s price action reflected competing forces. Escalating geopolitical tensions provided intermittent upward pressure, but market direction was largely shaped by expectations of a potential US–Iran agreement. That outlook contributed to broader bearish sentiment and pushed prices down over the week.

European gas follows: lower highs, modest rebound

In Europe’s gas market, ICE TTF gas futures for the Front Month contract tracked a similar pattern. Prices peaked at €48.14/MWh on Monday, May 4, before falling to a weekly minimum of €43.56/MWh on Thursday, May 7.

A slight recovery followed into Friday, with prices settling at €44.14/MWh on May 8. However, that still marked a 3.5% decline versus the previous week’s close.

Why deal hopes mattered for LNG sentiment

AleaSoft said the downward pressure in gas was supported by expectations that a US–Iran agreement could ease global supply concerns and potentially reopen key shipping routes, including the Strait of Hormuz. That improvement in market sentiment around future LNG flows helped shape how traders priced European gas during the week.

EEX December 2026 contract: firmer carbon pricing

Carbon-linked pricing in Europe showed a different trajectory in the EEX market for the December 2026 contract (as referenced by AleaSoft). Prices began the week at their minimum level of €73.06/t on May 4 and moved higher during subsequent sessions.

The weekly peak came on May 6 at €76.07/t, with prices staying above €75/t for most of the period. By Friday, May 8, the settlement price was €75.20/t—still 1.9% higher than the previous week’s closing level.

Mixed macro backdrop: de-escalation expectations vs policy support

Overall, commodity markets during the first week of May reflected a mixed macro environment: expectations of geopolitical de-escalation weighed on oil and gas prices, while carbon markets remained relatively firm due to continued structural pressure from EU emissions policy.