Saed News: Following Iran’s threat to close the Strait of Hormuz, gas prices in Europe faced a new surge, raising concerns about energy security on the Green Continent.
According to Saed News, citing Fars News Agency, amid traders’ fears of a potential escalation in conflict between Israel and Iran and risks to global energy supply, natural gas prices in Europe have risen. The benchmark futures contracts in European markets increased by 2.7 percent, following severe volatility in the previous trading session.
Growing demand and unstable outlook
According to Bloomberg, although Europe currently holds relatively stable natural gas reserves, its heavy dependence on global liquefied natural gas (LNG) flows makes prices vulnerable to geopolitical fluctuations. Europe will have increasing fuel needs in the coming months to replenish reserves, which fell to their lowest levels in three years during last winter. One of the main threats is the possible closure of the Strait of Hormuz by Iran if the conflict expands. Such a move could block LNG shipments from Qatar—one of the largest exporters of this fuel—and disrupt global energy supplies. The Strait is also a key oil export route in the region. While Qatar has stated that maritime traffic in the area remains normal, traders are closely monitoring any changes in tanker movements.
Limited impact of tensions and China’s role
Frederick Weitzman and Samantha Dart, analysts at Goldman Sachs, told Bloomberg that the conflict’s impact on global gas markets has so far been limited. They noted that reduced Chinese imports have freed up more fuel for other buyers such as Egypt, a country seeking alternative suppliers following reduced gas exports from Israel.
Europe’s plans to reduce dependence on Russia
Meanwhile, traders are also watching developments regarding the European Union’s plans to gradually reduce reliance on Russian gas imports by the end of 2027. This includes both pipeline gas and LNG, which currently accounts for about 13 percent of the region’s imports. The European Commission is expected to soon present detailed proposals regarding a ban on imports from Russia.
In the latest trades, Dutch gas futures for the front month—the European gas price benchmark—rose 2.5 percent to 38.85 euros (44.90 dollars) per megawatt-hour. Florence Schmidt, energy strategy expert at Rabobank, warned that if Qatar’s gas supply is disrupted, prices will rise beyond the current range.
