European Gas Prices Skyrocket Amid Persian Gulf Conflict
European natural gas prices surged to their highest levels since March on Tuesday due to escalating military conflict in the Persian Gulf and post-holiday surges in British wholesale contracts.
The benchmark Dutch front-month contract rose by 1.3% to 71.30 euros per megawatt-hour (MWh), exceeding the 70-euro threshold, while the NBP wholesale gas contract in Great Britain jumped by 6.4% to 175.40 pence per therm.
The primary driver of this rally is the threat of extended transit halts through the Strait of Hormuz following direct kinetic strikes between U.S. and Iranian forces over the weekend, which could disrupt critical liquefied natural gas (LNG) supplies from major producer Qatar.
European utilities are already navigating diminished pipeline imports and now face aggressive competition for replacement spot LNG cargoes, driving global seaborne freight rates sharply higher.