European Gas Prices Hit Four-Month High Amid Middle Eastern Disruptions
European natural gas prices have hit their highest level since December 2022, climbing above €76/MWh on Wednesday. This marks the fourth consecutive session of gains for the market.
The surge in prices is attributed to ongoing strikes in the Middle East, which are heightening concerns over further supply disruptions. The US military's destruction of five Iranian oil tankers near Kharg Island on Tuesday has also contributed to these concerns.
Iran-backed Houthi militants have launched drones and missiles at energy facilities in southern Saudi Arabia, underscoring the challenges to restoring normal commercial traffic through the Strait of Hormuz. This has forced Qatar to suspend shipments and extend its force majeure on cargoes to Europe and Asia until autumn.
The reduced LNG deliveries are slowing European storage injections, leaving gas inventories below the seasonal average. As the winter heating season approaches, this vulnerability is becoming increasingly pronounced.