European natural gas futures jumped 50% to a one-year high of €47/MWh, extending a sharp rally that began earlier in the day, after the war in the Middle East directly disrupted gas supplies to Europe. QatarEnergy has suspended liquefied natural gas (LNG) production at its Ras Laffan and Mesaieed complexes—facilities that together account for roughly 20% of global LNG output—following a drone strike on a water tank at one of the sites.
The halt in Qatari exports jeopardizes about 15% of the European Union’s LNG imports, exacerbating strains in an already tight global LNG market and intensifying bidding competition for cargoes from US suppliers. In addition to the attack on the LNG facility itself, LNG shipping companies have paused tanker traffic through the Strait of Hormuz, further constraining supply from other major Middle Eastern gas producers.
These supply risks are amplified by relatively low EU gas storage levels, now below 31%, compared with around 40% at the same point last year.
