European natural gas prices climbed to a three-year high on Tuesday due to US‑Israeli military operations against Iran, now in their second week. The Dutch TTF rose 68% for the week ending March 6 on the possibility of a prolonged disruption to LNG supplies following the closure of the Strait of Hormuz.

Qatar shut its Ras Laffan plant, the world’s largest natural gas export facility, after it was targeted by an Iranian drone attack. The Ras Laffan plant accounts for about 20% of the global liquefied natural gas supply. Energy prices may rise further as the Trump administration considers special forces operations inside Iran. The US may seize Kharg Island, Axios reported. Kharg is home to the crude loading port at the heart of Iran’s oil export industry.

Weekly Chart: Natural Gas Prices Surge

Concerns about Middle East energy supplies coincided with a bullish report from the Energy Information Administration. Its weekly report showed that natural gas inventories for the week ended February 27 fell by 132 bcf, a larger draw than the market consensus of 124 bcf and the 5‑year weekly average draw of 96 bcf. As of March 4, gas storage in Europe was 30% full, compared to the 5‑year seasonal average of 44% for this time of year.

Source: TradingView

Taken together, the geopolitical backdrop has amplified market sensitivity to supply data. West Texas Intermediate crude surged nearly 30% Sunday night to $120 a barrel. Prices then dropped by 15% to near $100.

Why it matters: The Israel–US military strikes on Iran have sent oil and gas prices higher, on fears of deeper supply disruptions. On Sunday, President Donald Trump said surging oil prices are a “very small price to pay” for global security as escalating tensions with Iran pushed crude above $100 a barrel.

This may accelerate core inflation across the Euro Area and complicate ECB policy during a period of leadership uncertainty. The ECB's Chief Economist, Philip Lane, has warned that a renewed spike in inflation is possible on the back of current developments. In February, Euro Area core inflation jumped to 2.4% from 2.2%.

Source: Atlantic Council

Geopolitics: Europeans Diverge on Iran Strikes 

The US‑Israeli military operation against Iran has escalated since the two allies launched their attacks on February 28. War Secretary Pete Hegseth vowed that he and President Trump would do whatever it takes to topple the Iranian regime. He didn't rule out sending US ground troops into Tehran as Operation Epic Fury rages on.

Against this backdrop, Europe's political response has been fractured. The US and some of its European allies have diverged on Washington's military strikes against Iran. Spain has barred US military planes from using its jointly operated bases in Andalusia. Trump said the US would seek to "cut off all trade with Spain." French President Emmanuel Macron said Tuesday that the strikes on Iran were "outside the framework of international law."

"This is not Winston Churchill that we're dealing with," Trump said on Monday. He made his comments after UK Prime Minister Keir Starmer refused to allow the US to use British bases. Starmer pivoted later to allow the use of its bases for "defensive" actions.

Germany Takes More Moderate Position

Germany's position has been more sympathetic to the underlying goals of the US and Israel. Chancellor Friedrich Merz described Iran as a major security threat. He argued that decades of sanctions and diplomacy have failed to halt Tehran's destabilizing activities.

Polish President Karol Nawrocki has framed the conflict primarily through a security lens. He has argued that Iran's actions pose a broader threat to international stability. 

Eastern Europe, nations such as the Baltics, the Czech Republic, and Romania, have expressed similar support. Poland's position reflects its broader strategic alignment with Washington on matters of defense and deterrence.

Why it matters: The divergence in Europe has highlighted a deep divide over US-Israeli military intervention. The lack of a unified European reaction reflects the reality that Europe has relatively limited strategic weight in the conflict itself, the Council on Foreign Relations said. Europe "faces an increasingly strained relationship with its most important ally, the United States," it said.

Europe in the News: European News Coverage Critical of Iran Strikes

These political divisions have been mirrored in European media coverage. European news coverage has portrayed the US‑Israeli strikes on Iran as abrupt, escalatory, and diplomatically destabilizing. Reporting has emphasized that Washington launched the operation with minimal consultation and left EU governments scrambling to respond. Outlets have highlighted a fragmented European reaction. The UK seeks to strike a balance between its transatlantic loyalty and calls for de-escalation. France warned that military action outside international law risks global instability. Paris condemned Iranian retaliation.

Data This Week: Euro Area, UK Production Data 

Euro Area:

Industrial Production MoM (Friday): Previous reading -1.4% (December)

Industrial Production YoY (Friday): Previous reading 1.2% (December)

United Kingdom:

Industrial Production MoM (Friday): Previous reading -0.9% (December)

Manufacturing Production MoM (Friday): Previous reading -0.5% (December)

Industrial Production YoY (Friday): Previous reading 0.5% (December)

Manufacturing Production YoY (Friday): Previous reading 0.5% (December)

GDP YoY (Friday): Previous reading 0.7% (December)

UK Industrial Production, YoY, source: TradingEconomics

Switzerland:

Consumer Confidence Index (Monday): Unchanged at -30 in February, matching market expectations.

Why it matters: The latest figures show that both the euro area and the UK entered the new year with weak industrial output and soft manufacturing activity. This points to fragile underlying growth. The economic impact of the Iran conflict has yet to hit the Euro Area. Looking more closely at the data, the picture remains fragile and uneven.

Traders are now betting that the European Central Bank cuts rates twice this year. They expect the Bank of England to raise its rate once, Bloomberg reported on Monday. Weak stock markets, the strengthening dollar, and oil prices above $100 a barrel point to accelerating inflation. 

The negative month‑on‑month readings signal a loss of short‑term momentum. The mixed or modest year‑on‑year numbers suggest that any recovery remains uneven and vulnerable to global demand pressures. With UK GDP growing just 0.7% year on year, the economy is expanding marginally. It is constrained by tight financial conditions and subdued industrial performance.

Policy Moves: Europe Needs a Regulatory Overhaul 

Europe needs to overhaul the regulatory system it built after the 2008 financial crisis and shift its focus from simply ensuring bank resilience to actively strengthening the sector's global competitiveness, Euractiv reported, citing the EU's finance chief. Maria Luís Albuquerque said on Thursday that the framework designed during the eurozone turmoil—triggered by the collapse of the US housing market—must be reconfigured so European financial institutions can "compete globally."

Policymakers should "find the courage to ask ourselves whether the approach we put in place in the aftermath of the financial crisis is fully future‑proof," she said.

Why it matters: These pressures have intensified calls for regulatory reform. The calls for reform come amid repeated complaints by EU banks that the bloc's financial regulations have hampered their ability to compete with US firms. European banks and companies have struggled to compete with US counterparts, even as Brussels moves to cut red tape. German Chancellor Merz has called for the EU to reduce bureaucracy substantially in Europe.

Stock in Focus: Novo Nordisk Rises on Potential Hims & Hers Deal  

Novo Nordisk (NVO) stock rose 2.17% for the week ended March 6, 2026, closing at $38.58 on Friday. The company's stock gained on news that Novo Nordisk (NYSE:NVO) is planning to sell its obesity drugs on the telehealth platform run by Hims & Hers Health (NYSE:HIMS) as part of a partnership between the two firms, Bloomberg reported, citing a person familiar with the matter.

A spokesperson for the Danish drugmaker told Bloomberg, "We are always in conversation with companies that can help improve patient access to FDA‑approved medicines for people living with chronic diseases. These talks happen on an ongoing basis."

The stock has remained in a downtrend from mid‑February's highs above $48, trading near recent lows around $36–39.

Why it matters: Novo's potential partnership with Hims & Hers opens a high‑growth distribution channel, expanding patient access and boosting prescription volumes for high‑margin therapies like Wegovy. This reduces access friction, strengthens NVO’s competitive moat against rivals, and shifts its narrative toward a consumer‑oriented chronic disease leader, supporting higher valuation multiples, despite the deal being in talks rather than finalized, with uncertainties around pricing, reimbursement, and regulatory risks.

Disclaimer: Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. European Capital Insights is not responsible for any financial decisions made based on the contents of this article. Readers may use this article for information and educational purposes only. 

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.