European natural gas futures surged more than 20% to about €64/MWh on Monday, their highest level in three years, extending last week’s 67% rally amid escalating supply concerns. The latest spike comes in the wake of disruptions in the Strait of Hormuz, as the conflict in the Middle East enters its second week with no clear resolution in sight. These disruptions have prompted major producers in the region to curb output, while Qatar’s Ras Laffan— the world’s largest LNG plant—was shut down last week. At the same time, Russia has raised the prospect of suspending natural gas exports to Europe.
With EU gas storage now below 30%, Europe is heading into spring with significantly depleted reserves, fueling worries that LNG supplies may be insufficient to cover demand. In parallel, reports suggest that G7 finance ministers will meet today to discuss a possible coordinated oil release in cooperation with the International Energy Agency.
