Europe’s Gas Prices Jump as Hormuz Standoff Drags On

European natural gas benchmark prices climbed sharply at Thursday’s market open in Amsterdam as concerns grew over continued disruptions to LNG shipments passing through the Strait of Hormuz. The Dutch Title Transfer Facility (TTF) front-month contract jumped about 4% at the open, and after easing later in the morning it remained roughly 3% higher at $84.30 (74 euros) per megawatt-hour.

The market rally follows a run-up earlier in the month that pushed the TTF to as much as $93 (82 euros) per MWh — a level not seen since January 2023, when Europe confronted its first winter largely without Russian pipeline volumes. Traders cited the ongoing choke on flows from the Middle East, which has tightened global liquefied natural gas supply and lifted competition for cargoes that do not transit the Hormuz chokepoint.

While some Qatari and UAE cargoes have been able to transit the strait in recent weeks, market participants say those volumes are too limited to substantially rebalance global LNG availability. The United States and Iran held indirect discussions on the sidelines of the United Nations General Assembly this week, but those contacts produced no tangible breakthrough to reopen the disrupted shipping routes.

Rating agency Fitch said it had raised its TTF gas assumptions for this year and next because of the Iran-related disruptions, noting that LNG flows through Hormuz accounted for about 20% of global supply before the conflict. Fitch also pointed to EU gas storage sitting at roughly two-thirds full — adequate to prevent outages but well below the 80%–90% levels recorded at the same time in recent years — underscoring the region’s vulnerability as it heads into the colder months. (Source: OilPrice.com, reporting by Tsvetana Paraskova.)