Middle East Fighting Sends European Gas Prices Soaring
European natural gas prices surged to near €69/MWh on Sunday, their highest level since January 2023. The sharp increase was driven by renewed fighting in the Middle East, which has raised concerns over further delays to liquefied natural gas (LNG) exports from the Persian Gulf.
The flare-up began when Iran launched an attack on US air bases in Jordan, hours after US forces struck two Iranian launchers in the Strait of Hormuz. This heightened fears of disruptions to shipping through the key waterway, which has already constrained LNG exports from major Gulf producers like Qatar.
As a result, supplies of natural gas to Europe have been tightened during the critical gas-storage refill season. European gas storage facilities were 63% full in the final week of August, below historical averages and among the lowest levels recorded for this time of year.