Iran-US Tensions Send European Gas Prices Soaring
European natural gas prices have reached their highest level in over three and a half years due to escalating tensions between the US and Iran. The conflict has disrupted liquefied natural gas (LNG) supplies from the Gulf, with Qatar's largest LNG exporter largely suspending shipments to Europe and Asia.
The benchmark European gas contract rose 4.5% to €76.7 ($89.1) per megawatt-hour as of 1720GMT on Tuesday. This increase comes as Iran warned that energy infrastructure in the region, including US oil and gas facilities, could be vulnerable to additional attacks.
Qatar has extended force majeure on cargoes destined for European and Asian markets through the autumn due to continued disruptions in the Strait of Hormuz, a critical route for global oil and LNG supplies. Reduced LNG inflows have slowed the pace of gas storage injections in Europe ahead of the winter heating season.
EU storage facilities are around 66% full, below the seasonal average, leaving the European gas market exposed to further supply disruptions and colder-than-normal weather.