EU Natural Gas Falls Further Toward 20-Month Low

European natural gas futures jumped 5% to around €56/MWh on Monday, the highest in three years, building on last week’s 67% rally as supply concerns intensified. The surge follows disruptions in the Strait of Hormuz amid a Middle East conflict now in its second week with no resolution in sight. Qatar’s Ras Laffan LNG facility, the world’s largest, remains largely intact following its unprecedented shutdown last week, though the country’s energy minister warned that restarting operations and shipments could take weeks or even months. The halt in a major LNG exporter, could erase much of the global oversupply expected this year, according to Morgan Stanley. Russia has also raised the possibility of halting gas exports to Europe. With EU storage below 30%, the region is emerging from winter with depleted reserves. Meanwhile, G7 finance ministers are reportedly set to discuss a coordinated oil release with the International Energy Agency.

European natural gas futures rose above €52/MWh on Friday, heading for their largest weekly gain since February 2022, amid concerns that a prolonged conflict in the Middle East could severely disrupt gas supplies. Prices have surged more than 50% this week, reaching their highest levels since early 2023. Early signs of gas supply problems in the region are emerging, with Moldova’s breakaway Transnistria region warning it could run out of gas within days. Analysts expect that European gas storage could end March at only 22–27% of capacity, significantly below the five-year average of around 41%. If less LNG arrive in the next four weeks, storage levels could decline further, increasing the risk of supply shortages. Meanwhile, the Trump administration said it is weighing several measures to address the surge in energy prices.

European natural gas futures swung between gains and losses at around €50/MWh on Thursday, after an 8% drop in the previous session, after Russian President Putin's threat to shut off gas supplies to Europe. Still, Russian gas flows to Europe have already fallen significantly in recent years and are expected to decline further due to the EU ban on its gas imports. Russia accounted for an estimated 13% of the EU’s imports in 2025. A potential halt heightens risks to Europe’s balance, amid supply disruptions caused by Middle East tensions, with the world’s largest LNG plant in Qatar remaining offline and the Strait of Hormuz closed. On Wednesday, prices dropped 8.3% on reports that Iran had reached out to the US to negotiate an end to the conflict, though Tehran later denied the claim. Meanwhile, President Trump said the US would ensure and escort vessels passing through the Strait, but key details remain unclear. These come as EU gas storage is tight, currently below 30% of capacity.