European Natural Gas Prices Hit Multi-Year Highs as US-Iran Tensions Escalate
TLDR
- European natural gas prices jumped over 4% to above €74/MWh, the highest level in over three years
- Iran plans to declare a restricted maritime zone outside the Strait of Hormuz following US strikes on Iranian oil tankers
- The Strait of Hormuz handles roughly one-fifth of global LNG traffic, mostly from Qatar
- European gas storage sits at just 62% capacity, about 17 percentage points below the five-year average
- The ECB is expected to raise rates by 25 basis points this week as energy-driven inflation hits 3.3%
European natural gas prices surged on Monday, reaching levels not seen since late 2023. The benchmark Dutch front-month contract climbed to around €73.80 per megawatt-hour, just below last week’s peak of €74.32.
British wholesale gas prices also rose 2%, trading near 182.50 pence per therm, close to the 2023 high of 183.95 pence.
The gains come as military tensions between the US and Iran continue to escalate in the Persian Gulf.
US-Iran Conflict Threatens LNG Supply Routes
Iran announced plans to declare a restricted maritime zone outside the Strait of Hormuz in the coming days. This follows US forces striking and disabling three Iranian oil tankers over the weekend.
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