European Gas Prices Soar Amid Iran Conflict Fears
European wholesale natural gas prices have surged to their highest levels since early 2023, driven by concerns over a potential disruption in energy transit through the Strait of Hormuz.
The benchmark price surpassed €75 per megawatt-hour, while the equivalent price rose to 186 per therm, as traders factored in a geopolitical risk premium.
The escalation of military confrontation involving Iran has heightened anxiety about hostilities impeding liquefied natural gas (LNG) tankers navigating Persian Gulf maritime corridors.
The Strait of Hormuz serves as a critical choke point for global LNG flows, particularly from key exporter Qatar. Any prolonged shipping bottleneck would force European buyers into fierce bidding wars against Asian importers for alternative flexible LNG cargoes ahead of the winter heating season.