Natural gas prices across Europe reached their highest levels in four months following a fresh escalation of the US-Iran conflict in the Middle East. The Dutch natural gas benchmark briefly exceeded €60 per megawatt hour, approaching peaks observed when the conflict initially began. The price movement followed expanded US military operations and retaliatory strikes by Iran targeting Bahrain and Kuwait.
Analysts at Independent Commodity Intelligence Services warned that European gas supplies face significant pressure entering the winter months. The ongoing conflict has disrupted the anticipated recovery of liquefied natural gas exports from Qatar, which occurs during the critical summer storage season. The firm’s head of energy analytics noted that while supply security remains achievable, the cost of maintaining adequate reserves has increased substantially. Should winter conditions turn colder than expected, authorities may need to implement costly state interventions to ensure supply targets are met.
European gas storage levels currently stand at less than 54% capacity, down from 64% at the comparable period the previous year. Only 26 liquefied natural gas cargoes have departed the Gulf region since the conflict began on 28 February, compared with the typical monthly volume of 90 to 100 shipments. This reduction has prompted the intelligence firm to lower its forecast for global liquefied natural gas supply this year to 431 million tonnes from the previously projected 441 million tonnes.
European countries may face restocking costs of approximately €54 per megawatt hour during autumn months, potentially rising to €60 per megawatt hour if winter begins with particularly cold temperatures. The disruption also extends to oil markets, with Brent crude briefly exceeding $90 per barrel before moderating following statements that diplomatic negotiations between the US and Iran were continuing through intermediaries. Energy analysts emphasized that international market dynamics mean European gas prices remain significantly influenced by geopolitical events occurring thousands of miles away.
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