US-Iran Tensions Spark UK Gas Price Surge Amid LNG Supply Disruptions

UK natural gas prices surged to their highest level since January 2023 on Wednesday, reaching above 180 pence per therm. This significant increase comes as hostilities between the US and Iran escalate, fueling concerns about a prolonged disruption in liquefied natural gas (LNG) supplies from the Persian Gulf.

The latest developments saw Iran retaliate against US military bases in Jordan, Kuwait, and Bahrain following US attacks on Iranian targets near the Strait of Hormuz. The Strait is a critical waterway for LNG exports to Europe, with flows almost at a standstill due to the ongoing tensions.

European buyers are now scrambling to secure alternative cargoes as they prepare for the winter heating season, which will only exacerbate the supply shortage. With gas storage levels still below their usual seasonal levels, an extended disruption would leave the region vulnerable to sharper price volatility once colder weather arrives.