ISTANBUL
European natural gas markets recorded sharp gains over the past 24 hours, with benchmark Dutch TTF contracts rising around 50% as escalating Middle East tensions, mounting transit risks through the Strait of Hormuz and reports of halted production at Qatar’s Ras Laffan LNG facility intensified concerns over global supply.
Tom Marzec-Manser, director of Europe Gas & LNG at Wood Mackenzie, told Anadolu that in 2025, Qatar exported 81 million tons of LNG, with the UAE supplying a further 5 million tons. Kuwait, meanwhile, imported 8 million tons, so the global balance is effectively 78 million tons short because of the recent events.
He said the price surge is likely to curb demand in parts of South Asia, while already weak LNG consumption in China should help the market rebalance.
"Added to that, Wood Mackenzie expects 35 million tonnes of new LNG production in 2026, and this too will help cover the current supply-demand imbalance," Marzec-Manser said and added, "But it's fair to assume that the longer the Straits of Hormuz remains shut, the higher the gas prices will go."
Significant market shock exposes East Asia vulnerable
Mehdy Touil, lead LNG specialist and shareholder at Calypso Commodities, a tech company developing AI-based solutions for LNG scheduling, trading and shipping optimization, noted that the Iranian blockade of the Hormuz Strait just locked in over 83 million tonnes of LNG supply.
"That represents the most significant market shock since Russia halted exports to Europe in 2022 - and it already triggered a scramble for alternative cargoes. This time however, Europe is not the main pressure point. Its LNG portfolio leans heavily on FOB volumes from the US, limiting direct exposure to Qatari molecules," he said.
Touil added that the vulnerability lies in the East as China represents the single largest concentration of contractual exposure.
He said the key issue is no longer overall supply availability, but how quickly volumes can be rebalanced across regions. He noted that it is still too early to draw firm conclusions, yet many are already questioning whether the EU should delay its planned ban on Russian LNG.
He added that even if hostilities were to cease, clearing mines and restoring safe navigation would take considerable time, assuming Iran cooperates. He explained that two major arteries, oil and LNG, have effectively been cut, and the two markets are closely linked.
"On pricing, crude will soon enter triple digits territory with flows remaining impaired. For gas, markets are in full discovery mode, and volatility will remain high," Touil explained.
Spot LNG market faces rapid tightening if Gulf tensions escalate
Giovanni Bettinelli, an energy consultant from Dubai-based GFB Insight, said the immediate impact on global LNG flows, should tensions escalate further, would be a rapid tightening of the spot market, particularly due to transit risks through the Strait of Hormuz.
He noted that holders of long-term contracts with QatarEnergy and ADNOC would seek to replace disrupted volumes in the spot market, with most of the additional demand likely coming from Asia, where China and India are currently the largest LNG importers.
The repercussions are also expected to be felt in Europe. Bettinelli pointed out that the European market is likely to remain the premium destination for spot LNG cargoes, given the region's continued reliance on spot purchases to secure gas supply.
He added that the high rate of storage withdrawals over the past two months would exacerbate the impact, though in the short term significant security-of-supply risks are not expected.
"The likelihood of sustained price volatility versus a short-term risk premium: markets will remain highly volatile, especially in light of recent reports on damage to Qatari LNG production infrastructure," he said.
"Rather than fundamentals, prices will be reacting to the perceived risks of further disruptions and to changes to the outlook for the conflict. Overall, the actual impact on market balances remains tied to the duration of the conflict and the severity of any actual damage to LNG production capacity," Bettinelli added.
Prolonged Hormuz disruption would drive sharper gas price increases
Alex Froley, senior LNG analyst at ICIS in London, underlined the scale of potential disruption, noting that around 20% of the world's LNG is west of the Strait of Hormuz, mainly from Qatar, but also some from the UAE.
From Saturday afternoon, he said, LNG tankers started avoiding Hormuz, with vessels from Qatar that were heading east turning back west, while empty tankers returning to Qatar doubled back and are now waiting off the coast of Oman, away from the strait.
Froley emphasized that most Qatari cargoes are delivered to Asian buyers such as China, Japan, Korea and India. If these cargoes stop, he warned, Asia will compete to buy the remaining cargoes in the market, pushing up prices for Europe as well.
Referring to market reaction, Froley said that on March 2, Europe's TTF gas prices rose sharply to around €39 per megawatt-hours, up from around €32 per megawatt-hours last Friday. While describing the move as significant, he stressed that prices remain far below the record levels seen in 2022, when Russian gas flows to Europe stopped and the TTF briefly exceeded €300 per megawatt-hours in August of that year.
"The key question now is how long the interruption lasts. Markets can use gas in storage to cover a brief interruption. But the longer it lasts, the bigger the impact, and the more prices will rise," he said.
