Gulf LNG uncertainty pushes up European gas prices
Rising tensions over the Strait of Hormuz and uncertainty over liquefied natural gas supplies from the Gulf have driven up gas prices in Europe and deepened concerns about the continent’s readiness for the coming winter.
The Trading Economics website reported that European natural gas prices remained above 65 euros per megawatt-hour on Friday, a level described as unprecedented since January 2023.
The outlet said tensions between the United States and Iran have made the outlook for LNG exports from the Gulf region uncertain. According to the source, the two sides remain locked in a dispute over reopening the Strait of Hormuz, and the standoff has entered a new phase.
The report said that stranded Qatari LNG cargoes in the wake of the naval blockade have intensified competition between European companies and Asian buyers for access to available shipments, making them scarcer and more expensive. This situation has been identified as one of the main factors putting pressure on the European gas market.
Trading Economics also reported that higher demand for cooling during the heatwave has limited the pace of gas injections into storage facilities. According to the outlet, Europe’s gas reserves now stand at 62%, the lowest seasonal level since 2009.
The report added that Europe has limited time to refill its reserves before the heating season begins. It said gas prices in Europe have risen by more than 6% over the course of this week.
The Strait of Hormuz is considered one of the key energy transit routes in the region, and any disruption to shipping through it typically affects global oil and gas markets. Qatar is also one of the world’s major LNG exporters, and any change in its export pattern could affect Asian and European markets at the same time.
