The European carbon market rose early Monday, tracking massive gains in oil and gas amid geopolitical uncertainty in the Middle East. Still, the increase in carbon prices is less pronounced compared to fuel markets, with the EUAs rising as much as 1.6% in the first two hours of trading.

Oil prices surged almost 5% in early trading, in clear contrast to last week’s downtrend when Brent prices dropped by over 10%, the biggest weekly decline in seven months. Analysts warn that there is a high likelihood of further increases.

“If the conflict envelopes Iran… up to 3% of global oil supply is at risk. And if a wider conflict eventuates that ends up impacting transit through the Strait of Hormuz, around 20% of global oil supply could be held hostage,” said energy analyst Saul Kavonic quoted by Reuters.

Gas prices also rose sharply, trading as high as 10,55% compared to Friday’s settlement. The increase was attributed to the events in Israel over the weekend as well as a leak discovered on a pipeline in the Baltic region connecting the Finnish and Estonian grids.

The leak “sparked concerns that the event could be similar to blasts on the undersea Nord Stream gas pipeline just over a year ago”, writes Bloomberg, adding that the incident “comes just as the northern hemisphere is approaching its heating season, making it more vulnerable to disruptions in supply. “