Analys
Price forecast update: Weaker green forces in the EU Parliament implies softer EUA prices


We reduce our forecast for EUA prices to 2030 by 10% to reflect the weakened green political agenda in the EU Parliament following the election for the Parliament on 6-9 June. The upcoming election in France on 7 July is an additional risk to the political stability of EU and thus in part also to the solidity of the blocks green agenda. Environmental targets for 2035 and 2040 are most at risk of being weakened on the margin. EUA prices for the coming years to 2030 relate to post-2030 EUA prices through the bankability mechanism. Lower post-2030 climate ambitions and lower post-2030 EUA prices thus have a bearish impact on EUA prices running up to 2030. Actual softening of post-2030 climate ambitions by the EU Parliament have yet to materialize. But when/if they do, a more specific analysis for the consequences for prices can be carried out.
EUA prices broke with its relationship with nat gas prices following the EU Parliament election. The EUA price has dutifully followed the TTF nat gas price higher since they both bottomed out on 23 Feb this year. The EUA front-month price bottomed out with a closing price of EUR 50.63/ton on 23 Feb. It then reached a recent peak of EUR 74.66/ton on 21 May as nat gas prices spiked. Strong relationship between EUA prices and nat gas prices all the way. Then came the EU Parliament election on 6-9 June. Since then the EUA price and TTF nat gas prices have started to depart. Bullish nat gas prices are no longer a simple predictor for bullish EUA prices.
The front-month EUA price vs the front-year TTF nat gas price. Hand in hand until the latest EU Parliament election. Then departing.
The EU Parliament election on 6-9 June was a big backlash for the Greens. The Greens experienced an euphoric victory in the 2019 election when they moved from 52 seats to 74 seats in the Parliament. Since then we have had an energy crisis with astronomic power and nat gas prices, rampant inflation and angry consumers being hurt by it all. In the recent election the Greens in the EU Parliament fell back to 53 seats. Close to where they were before 2019.
While green politics and CO2 prices may have gotten a lot of blame for the pain from energy prices over the latest 2-3 years, the explosion in nat gas prices are largely to blame. But German green policies to replace gas and oil heaters with heat pumps and new environmental regulations for EU farmers are also to blame for the recent pullback in green seats in the Parliament.
Green deal is still alive, but it may not be fully kicking any more. Existing Green laws may be hard to undo, but targets for 2035 and 2040 will be decided upon over the coming five years and will likely be weakened.
At heart the EU ETS system is a political system. As such the EUA price is a politically set price. It rests on the political consensus for environmental priorities on aggregate in EU.
The changes to the EU Parliament will likely weaken post-2030 environmental targets. The changes to the EU Parliament may not change the supply/demand balance for EUAs from now to 2030. But it will likely weaken post-2030 environmental targets and and thus projected EU ETS balances and EUA prices post-2030. And through the bankability mechanism this will necessarily impact EUA prices for the years from now to 2030.
Weaker post-2030 ambitions, targets and prices implies weaker EUA prices to 2030. EUA prices are ”bankable”. You can buy them today and hold on to them and sell them in 2030 or 2035. The value of an EUA today fundamentally rests on expected EUA prices for 2030/35. These again depends on EU green policies for the post 2030 period. Much of these policies will be ironed out and decided over the coming five years.
Weakening of post-2030 targets have yet to materialize. But just talking about it is a cold shower for EUAs. These likely coming weakenings in post-2030 environmental targets and how they will impact EUA prices post 2030 and thus EUA prices from now to 2030 are hard to quantify. But what is clear to say is that when politicians shift their priorities away from the environment and reduce their ambitions for environmental targets post-2030 it’s like a cold shower for EUA prices already today.
On top of this we now also have snap elections in the UK on 4 July and in France on 7 July with the latter having the potential to ”trigger the next euro crisis” according to Gideon Rachman in a recent article in FT.
What’s to be considered a fair outlook for EUA prices for the coming five years in this new political landscape with fundamentally changed political priorities remains to be settled. But that EUA price outlooks will be lowered versus previous forecasts is almost certain.
We reduce our EUA price forecast to 2030 by 10% to reflect the new political realities. To start with we reduce our EUA price outlook by 10% from 2025 to 2030 to reflect the weakened Green agenda in the EU parliament.
SEB’s EUA price forecast, BNEF price forecasts and current market prices in EUR/MWh
Analys
Tightening fundamentals – bullish inventories from DOE

The latest weekly report from the US DOE showed a substantial drawdown across key petroleum categories, adding more upside potential to the fundamental picture.

Commercial crude inventories (excl. SPR) fell by 5.8 million barrels, bringing total inventories down to 415.1 million barrels. Now sitting 11% below the five-year seasonal norm and placed in the lowest 2015-2022 range (see picture below).
Product inventories also tightened further last week. Gasoline inventories declined by 2.1 million barrels, with reductions seen in both finished gasoline and blending components. Current gasoline levels are about 3% below the five-year average for this time of year.
Among products, the most notable move came in diesel, where inventories dropped by almost 4.1 million barrels, deepening the deficit to around 20% below seasonal norms – continuing to underscore the persistent supply tightness in diesel markets.
The only area of inventory growth was in propane/propylene, which posted a significant 5.1-million-barrel build and now stands 9% above the five-year average.
Total commercial petroleum inventories (crude plus refined products) declined by 4.2 million barrels on the week, reinforcing the overall tightening of US crude and products.


Analys
Bombs to ”ceasefire” in hours – Brent below $70

A classic case of “buy the rumor, sell the news” played out in oil markets, as Brent crude has dropped sharply – down nearly USD 10 per barrel since yesterday evening – following Iran’s retaliatory strike on a U.S. air base in Qatar. The immediate reaction was: “That was it?” The strike followed a carefully calibrated, non-escalatory playbook, avoiding direct threats to energy infrastructure or disruption of shipping through the Strait of Hormuz – thus calming worst-case fears.

After Monday morning’s sharp spike to USD 81.4 per barrel, triggered by the U.S. bombing of Iranian nuclear facilities, oil prices drifted sideways in anticipation of a potential Iranian response. That response came with advance warning and caused limited physical damage. Early this morning, both the U.S. President and Iranian state media announced a ceasefire, effectively placing a lid on the immediate conflict risk – at least for now.
As a result, Brent crude has now fallen by a total of USD 12 from Monday’s peak, currently trading around USD 69 per barrel.
Looking beyond geopolitics, the market will now shift its focus to the upcoming OPEC+ meeting in early July. Saudi Arabia’s decision to increase output earlier this year – despite falling prices – has drawn renewed attention considering recent developments. Some suggest this was a response to U.S. pressure to offset potential Iranian supply losses.
However, consensus is that the move was driven more by internal OPEC+ dynamics. After years of curbing production to support prices, Riyadh had grown frustrated with quota-busting by several members (notably Kazakhstan). With Saudi Arabia cutting up to 2 million barrels per day – roughly 2% of global supply – returns were diminishing, and the risk of losing market share was rising. The production increase is widely seen as an effort to reassert leadership and restore discipline within the group.
That said, the FT recently stated that, the Saudis remain wary of past missteps. In 2018, Riyadh ramped up output at Trump’s request ahead of Iran sanctions, only to see prices collapse when the U.S. granted broad waivers – triggering oversupply. Officials have reportedly made it clear they don’t intend to repeat that mistake.
The recent visit by President Trump to Saudi Arabia, which included agreements on AI, defense, and nuclear cooperation, suggests a broader strategic alignment. This has fueled speculation about a quiet “pump-for-politics” deal behind recent production moves.
Looking ahead, oil prices have now retraced the entire rally sparked by the June 13 Israel–Iran escalation. This retreat provides more political and policy space for both the U.S. and Saudi Arabia. Specifically, it makes it easier for Riyadh to scale back its three recent production hikes of 411,000 barrels each, potentially returning to more moderate increases of 137,000 barrels for August and September.
In short: with no major loss of Iranian supply to the market, OPEC+ – led by Saudi Arabia – no longer needs to compensate for a disruption that hasn’t materialized, especially not to please the U.S. at the cost of its own market strategy. As the Saudis themselves have signaled, they are unlikely to repeat previous mistakes.
Conclusion: With Brent now in the high USD 60s, buying oil looks fundamentally justified. The geopolitical premium has deflated, but tensions between Israel and Iran remain unresolved – and the risk of missteps and renewed escalation still lingers. In fact, even this morning, reports have emerged of renewed missile fire despite the declared “truce.” The path forward may be calmer – but it is far from stable.
Analys
A muted price reaction. Market looks relaxed, but it is still on edge waiting for what Iran will do

Brent crossed the 80-line this morning but quickly fell back assigning limited probability for Iran choosing to close the Strait of Hormuz. Brent traded in a range of USD 70.56 – 79.04/b last week as the market fluctuated between ”Iran wants a deal” and ”US is about to attack Iran”. At the end of the week though, Donald Trump managed to convince markets (and probably also Iran) that he would make a decision within two weeks. I.e. no imminent attack. Previously when when he has talked about ”making a decision within two weeks” he has often ended up doing nothing in the end. The oil market relaxed as a result and the week ended at USD 77.01/b which is just USD 6/b above the year to date average of USD 71/b.

Brent jumped to USD 81.4/b this morning, the highest since mid-January, but then quickly fell back to a current price of USD 78.2/b which is only up 1.5% versus the close on Friday. As such the market is pricing a fairly low probability that Iran will actually close the Strait of Hormuz. Probably because it will hurt Iranian oil exports as well as the global oil market.
It was however all smoke and mirrors. Deception. The US attacked Iran on Saturday. The attack involved 125 warplanes, submarines and surface warships and 14 bunker buster bombs were dropped on Iranian nuclear sites including Fordow, Natanz and Isfahan. In response the Iranian Parliament voted in support of closing the Strait of Hormuz where some 17 mb of crude and products is transported to the global market every day plus significant volumes of LNG. This is however merely an advise to the Supreme leader Ayatollah Ali Khamenei and the Supreme National Security Council which sits with the final and actual decision.
No supply of oil is lost yet. It is about the risk of Iran closing the Strait of Hormuz or not. So far not a single drop of oil supply has been lost to the global market. The price at the moment is all about the assessed risk of loss of supply. Will Iran choose to choke of the Strait of Hormuz or not? That is the big question. It would be painful for US consumers, for Donald Trump’s voter base, for the global economy but also for Iran and its population which relies on oil exports and income from selling oil out of that Strait as well. As such it is not a no-brainer choice for Iran to close the Strait for oil exports. And looking at the il price this morning it is clear that the oil market doesn’t assign a very high probability of it happening. It is however probably well within the capability of Iran to close the Strait off with rockets, mines, air-drones and possibly sea-drones. Just look at how Ukraine has been able to control and damage the Russian Black Sea fleet.
What to do about the highly enriched uranium which has gone missing? While the US and Israel can celebrate their destruction of Iranian nuclear facilities they are also scratching their heads over what to do with the lost Iranian nuclear material. Iran had 408 kg of highly enriched uranium (IAEA). Almost weapons grade. Enough for some 10 nuclear warheads. It seems to have been transported out of Fordow before the attack this weekend.
The market is still on edge. USD 80-something/b seems sensible while we wait. The oil market reaction to this weekend’s events is very muted so far. The market is still on edge awaiting what Iran will do. Because Iran will do something. But what and when? An oil price of 80-something seems like a sensible level until something do happen.
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