European natural gas prices climbed above €82 per megawatt-hour on Friday, their highest level since December 2022, as continued disruptions to LNG supplies from the Persian Gulf rattled markets. Tensions between the United States and Iran have escalated over the past two weeks, focused on control of the Strait of Hormuz. The ongoing blockade has already disrupted around 20% of global LNG shipments, with Qatari exports bearing the brunt.
Europe has faced mounting difficulties in rebuilding its gas inventories. Storage facilities are only about 67% full, the lowest level for this point in the year in data going back to 2009. Although the European Commission maintains that there is no immediate threat to gas security this winter, a prolonged interruption to LNG flows from the Gulf could further tighten global supply. In that scenario, Europe would likely have to compete more aggressively with Asian and other importers for alternative cargoes, pushing prices even higher just as heating demand begins to rise.
European gas prices have already jumped more than 14% this week, marking their fifth consecutive weekly increase.
