Hormuz Standoff Sends European Gas Prices Soaring Again
Europe's natural gas prices jumped 4% at trade open in Amsterdam on Thursday due to ongoing tensions over the Strait of Hormuz. The US and Iran remain far apart on resolving their conflict, which has blocked liquefied natural gas (LNG) shipments from the region.
The front-month price at the Dutch Title Transfer Facility (TTF), Europe's benchmark for gas trading, was up 3% to $84.30 per megawatt-hour (MWh) as of mid-morning. This is a significant increase from its peak this month, which reached $93 per MWh.
The TTF price has eased in recent days but remains higher than usual due to concerns over LNG supply. Fitch Ratings raised its TTF gas assumptions for this year and next, citing disruptions to LNG flows through Hormuz. These flows accounted for 20% of global LNG supply before the conflict.
European gas storage is only two-thirds full, which could lead to supply disruptions during winter if no solution is found. The EU relies heavily on imported LNG due to reduced Russian pipeline gas supply since last year's energy crisis.