Multi-Year UK Gas Prices Soar Amid US-Iran Conflict

UK natural gas prices have reached a multi-year high of 161 pence per therm, a level not seen since January 2023. The current stalemate in the US-Iran conflict is largely to blame, as it has muddied the outlook for Gulf LNG supplies.

The two nations' continued clashes over the Strait of Hormuz have led to a maritime blockade that has stranded Qatari LNG cargoes in Europe. As a result, European utilities are being forced into intense and costly competition with Asian buyers for available cargoes.

This heatwave-driven demand for cooling is also limiting gas injections into storage, leaving Europe's storage levels at just 62% - the lowest seasonal level on record dating back to 2009. With limited time remaining before the heating season begins, the region faces a significant challenge in replenishing its inventories.