EU Gas Prices Soar Amid Gulf Disruption
The European benchmark Dutch TTF gas price jumped above €70 per megawatt-hour on Monday due to uncertainty over liquefied natural gas (LNG) supplies from the Gulf.
The disruption comes after US forces struck Iranian rocket launchers near the Strait of Hormuz, prompting Iran to retaliate by firing missiles at US forces in Jordan. This escalation threatens to cause further disruption to LNG exports through the Strait, which normally accounts for one-fifth of global trade.
EU gas storage facilities were 64.7% full as of this time last year, leaving inventories below historical levels. High market prices have slowed the refilling process in many countries, raising concerns that the Netherlands and Germany could miss their gas-storage targets of 80% and 70%, respectively, by November 1st.
Sebastian Heinermann, managing director of the German gas-storage association INES, warned that insufficiently filled gas storage facilities combined with a cold winter could leave Germany unable to cover normal gas demand in full. 'If gas prices then rise above the level that industrial consumers can afford, companies will be forced to reduce production,' he said.