Strait of Hormuz Tensions Drive European Gas Prices to New Highs

European natural gas prices have hit their highest level since January 2023, surpassing €64 per MWh on Wednesday. The surge comes as concerns grow over a potential winter supply crunch due to ongoing tensions in the Strait of Hormuz.

President Donald Trump stated that no talks with Iran are currently taking place or scheduled, and that the US naval blockade remains in full force. He added that the strait is open and operating, contrary to Iran's assertion that it will remain closed until Washington meets its conditions.

Traffic through the waterway has come to a standstill, resulting in delayed deliveries of Qatari LNG tankers to Europe. This reduced inflow, combined with summer heatwaves driving up demand for gas-fired power generation, is slowing the seasonal buildup of gas inventories.

As a result, traders are growing increasingly concerned that Europe may enter the winter heating season with insufficient reserves, maintaining upward pressure on gas prices.