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European Gas Prices · LNG · Strait Of Hormuz · Supply Disruption
European natural gas prices have surged significantly, with benchmark Dutch TTF contracts rising around 50% due to escalating Middle East tensions and transit risks through the Strait of Hormuz, compounded by halted production at Qatar's Ras Laffan LNG facility.
Experts estimate a global supply deficit of 78 million tons due to these events. While new LNG production in 2026 and potential demand curbing in South Asia may help rebalance the market, prolonged disruptions in the Strait of Hormuz are expected to drive gas prices higher.
The situation has caused a significant market shock, with East Asia, particularly China, being the most vulnerable due to heavy contractual exposure. Although Europe's direct exposure to Qatari LNG is limited, it remains a premium destination for spot cargoes.
The market is experiencing high volatility, with prices reacting to perceived risks and conflict outlook, rather than just fundamentals. The duration and severity of the conflict, and potential damage to LNG production capacity, will ultimately determine the market impact.
