European Gas at Highest Level Since End of 2022 on U.S.-Iran Hostilities
European gas prices have climbed to their strongest level since the close of 2022, spurred by mounting tensions between the United States and Iran that have raised fears of extended interruptions to energy shipments.
Escalating Us‑iran Hostilities
At 0728 GMT, Dutch front‑month futures – the reference contract for European natural‑gas markets – jumped 2.3 percent to 73.85 euros per megawatt‑hour in early trading on the continent. The same contract has risen roughly 25 percent since the start of the month, reflecting investor anxiety over the latest flare‑up in the Persian Gulf.
Rising Futures Prices
Analysts note that the spike comes as the Gulf dispute clouds expectations for a rebound in regional liquefied natural gas (LNG) exports. With the prospect of Iranian oil and gas flows being curtailed, market participants are reassessing supply‑side risks that could linger well into the winter heating season.
LNG Export Outlook
ING’s research team points out that, after accounting for freight costs, Europe now offers a higher profit margin for LNG cargoes than Asian destinations. The firm warned, however, that “competition between the two regions is likely to pick up, particularly if Qatari LNG remains largely absent from the market through year‑end.” The quotation is attributed to Giulia Petroni, whose contact appears as giulia.petroni@wsj.com in the original filing.
European Storage Concerns
Compounding the price surge, European gas storage inventories are lagging behind typical seasonal levels. Lower-than‑average stockpiles have heightened worries that the continent could face tighter supply conditions as colder weather approaches, especially if the Gulf situation prevents a swift restoration of LNG flows.
Winter Competition
With winter on the horizon, market observers expect a sharpening of the rivalry between Europe and Asia for the limited pool of LNG cargoes. Should Qatari shipments stay scarce through the end of the year, the pressure on European buyers could intensify, potentially pushing futures even higher.
The confluence of geopolitical risk, elevated futures pricing, and sub‑seasonal storage shortfalls underscores the fragile balance Europe faces in securing its gas needs. Traders will be watching developments in the Persian Gulf closely, as any further escalation between Washington and Tehran could translate into additional price volatility and supply constraints for the European energy market.
Source: wsj.com · 2026-09-02