European gas prices soar up to 48% amid Middle East tensions

LONDON

European gas prices surged by 48% intraday after tanker traffic through the strategically vital Strait of Hormuz — a key artery for global energy supplies — largely ground to a halt following joint US and Israeli strikes on Iran.

At the Dutch-based Title Transfer Facility (TTF), Europe’s deepest and most liquid virtual natural gas trading hub, April futures traded at €47.2 ($55.2) per megawatt-hour intraday, up from €31.95 per megawatt-hour on Feb. 27, prior to the attacks.

That marked an intraday increase of up to 48% compared with the previous close.

Meanwhile, QatarEnergy announced it had halted liquefied natural gas (LNG) production after an Iranian-launched drone targeted one of its energy facilities in Ras Laffan Industrial City, Qatar. The development heightened concerns over global LNG supply and added further upward pressure on prices.

The Strait of Hormuz, a narrow waterway at the mouth of the Persian Gulf, connects Middle Eastern oil and LNG production to global markets via the Gulf of Oman and the Indian Ocean.

Roughly 20% of global LNG exports pass through the strategic chokepoint. Qatar — one of the world’s largest LNG exporters — ships nearly all of its LNG exports through the strait to international buyers.

While China and other Asian nations account for the bulk of LNG cargoes transiting Hormuz, any potential supply disruption reverberates across global gas markets, driving prices higher in Europe in particular.

Adding to the upward pressure, Europe’s gas storage levels have fallen below 30%. Lower storage inventories increase the continent’s reliance on LNG imports from international markets, amplifying sensitivity to global supply shocks.

* Writing by Mucahithan Avcioglu and Handan Kazanci in Istanbul