Middle East Tanker Threats Drive European Gas Price Surge

European and British wholesale natural gas prices surged on Tuesday, reversing early-week declines. The Dutch front-month contract climbed 3% to 75.74 euros per megawatt-hour (MWh), while the British equivalent rose 3 pence to 189.00 pence per therm. The uptick came despite a recent increase in LNG shipments through the Strait of Hormuz, as ongoing tanker attacks in the Middle East raised concerns over supply disruptions.

The volume of LNG cargoes exiting the Strait of Hormuz reached its highest monthly level since February in September. This rise was supported by the partial resumption of regional pipeline networks and loading terminals. However, drone and missile strikes targeting commercial tankers and energy infrastructure in the Persian Gulf and Red Sea have kept shipping insurance rates elevated and transit routes unpredictable.

Market participants remain vigilant about potential disruptions that could bottleneck LNG deliveries to Western European regasification terminals. Meanwhile, EU gas storage levels have continued to build ahead of peak winter demand, with inventories currently at 72% capacity, up from 66% last month. While this provides a partial buffer, storage levels remain below historical benchmarks, leaving prices sensitive to early cold snaps or geopolitical delays.