Europe's Gas Prices Soar Amidst Strait of Hormuz Uncertainty
European natural gas prices have reached their highest level since January 2023, surpassing €70/MWh. This surge is attributed to concerns over Europe's gas supply security, particularly with the flare-up in US-Iran tensions that may prolong the closure of the Strait of Hormuz.
The Strait, through which one-fifth of global LNG trade normally passes, has seen heightened competition for supplies due to sustained disruption. Asian buyers are now competing with European ones, tightening gas supplies during the critical gas-storage refill season.
EU gas storage facilities were only 64% full as of this time, below historical levels. The uncertainty over LNG supplies from the Persian Gulf and low storage levels are driving prices upward, despite milder weather forecasts that could limit near-term demand.