EU Gas Hits 3-1/2-year High

European natural gas prices rose further to around €74/MWh on Wednesday, the highest level since January 2023, as rising hostilities between the US and Iran heightened fears of a prolonged disruption to LNG supplies from the Persian Gulf. Iran struck back at US military bases in Jordan, Kuwait and Bahrain following the latest US attacks on Iranian targets near the Strait of Hormuz, which President Trump said were in response to Iranian mine-laying attempts in the waterway and an earlier attack on a US base in Jordan. The escalation comes as LNG flows through the strait were almost at a standstill, tightening supplies and forcing European buyers to compete more aggressively for alternative cargoes as they prepare for the winter heating season. With European gas storage levels still below their usual seasonal levels, an extended disruption would leave the region more exposed to sharper price volatility once colder weather arrives.

EU Gas increased to 74.40 EUR/MWh, the highest since January 2023. Over the past 4 weeks, Natural Gas EU gained 29.09%, and in the last 12 months, it increased 133.65%.

European natural gas prices extended rally, climbing above €71/MWh on Tuesday, the highest level since January 2023, as the flare-up in US-Iran tensions heightened concerns over Europe’s gas supply security heading into the heating season. The US and Iran exchanged strikes for the first time in a month over the weekend, threatening to prolong the effective closure of the Strait of Hormuz, through which roughly one-fifth of global LNG trade normally passes. The prospect of sustained disruption has intensified competition with Asian buyers, tightening supplies bound for Europe during the critical gas-storage refill season. EU gas storage facilities were around 64% full, below historical levels for this time of year. Low storage levels and uncertainty over LNG supplies from the Persian Gulf are putting upward pressure on prices, offsetting milder weather forecasts for early September that could limit near-term demand.