Middle East Tensions Push European Gas Prices to Multi-Year Highs
European natural gas prices have reached multi-year highs, with spot prices hovering around €79/MWh on Thursday. This comes as escalating attacks in the Middle East disrupt LNG shipments through the Strait of Hormuz, a critical route that handles approximately 20% of global gas flows. Iran has reportedly attacked 10 ships near the strait and warned it would step up strikes if Washington continued its attacks on Iranian territory.
The supply risks are exacerbated by maintenance in Norway and lower Algerian flows to Italy, limiting pipeline supplies to Europe. As a result, European gas inventories remain below historical norms, raising concerns about the region's gas supply outlook.
Europe is nearing the end of its summer storage injection season, which could further intensify competition for global gas supplies during the winter months. The Strait of Hormuz plays a vital role in the global gas trade, with Qatar being one of the main exporters through this route.