After posting a 1.3% weekly loss on Friday, the European carbon market continued its downward move in Monday’s session, with the EUA Dec ’26 contract settling at €73.04, its lowest level since mid-April. This also marks a fourth straight close within the €73–€74 range.

Yesterday’s turnover reached 13.5 million allowances, with activity subdued amid a public holiday in the UK. While slightly higher than Friday’s volume, it remained well below this year’s daily average of 31.1 million. Combined with the tight trading range, this points to a continued “wait-and-see” stance among market participants.

On the European energy related markets, the situation was completely different as the “ re-escalation of tensions in the Persian Gulf pushed oil and gas prices higher as the market once again reprices the duration of supply disruptions from the region,” according to ING analysts. 

The Brent front-month contract surged by more than $6 to settle at $114.44/bbl. This is its highest level so far this year, after President Donald Trump’s new initiative called Project Freedom, was widely seen as a failure on its first day.

The planned escort operation intended to ensure safe passage through the Strait of Hormuz failed to attract participation, with just four vessels reportedly joining the initiative on Monday, according to S&P Global Market Intelligence. “Before the war, around 130 vessels made the passage daily” stated The New York Times. 

“The market continues to await clarity on free allocation and geopolitical developments, remaining particularly sensitive to headlines regarding the Strait of Hormuz” predict BBVA analysts adding that “EUAs are likely to remain range-bound within the corridor of EUR69-78, with limited conviction to sustain a breakout in either direction.”