Middle East Conflict Threatens Europe Gas Price Surge

This disruption, stemming from the shutdown of shipping through the Strait of Hormuz and rerouting of LNG tankers to Asia, impacts countries like Italy and Belgium most significantly. Current prices are around €50/MWh, a stark contrast to the 2022 peak exceeding €300/MWh.

A three-month halt removes 21 million tonnes of LNG, draining European storage to critical lows; most EU countries are currently below their 5-year average storage levels, with Germany and the Netherlands showing the most depleted reserves. The European Commission states the EU27 is "not currently facing security of supply issues" but Energy Commissioner Dan Jørgensen urged early refilling of gas reserves, with storage targets flexible from 90% down to 70% in difficult conditions.

A six-month disruption scenario predicts a "2022-style squeeze or worse," with prices near €160/MWh and spikes potentially exceeding €200/MWh, compromising winter storage refilling and necessitating demand cuts, as senior LNG analyst Tom Purdie of Energy Aspects confirms.