Iran Tensions Drive European Gas Prices to 2-Year High
European wholesale natural gas prices have surged to their highest levels since early 2023 due to fears that escalating military confrontation involving Iran could disrupt energy transit through the Strait of Hormuz.
The benchmark price surpassed €75 per megawatt-hour, while equivalent prices rose to 186 per therm as traders priced in a geopolitical risk premium.
The sharp increase reflects concerns that ongoing hostilities in the Middle East could impede liquefied natural gas (LNG) tankers navigating Persian Gulf maritime corridors, particularly from key exporter Qatar.
This could lead to shipping bottlenecks and force European buyers into fierce bidding wars with Asian importers for alternative flexible LNG cargoes ahead of the winter heating season.