Middle East Tensions Push European Gas Prices to Multi-Year Highs

The volatility follows a resumption of strikes between Washington and Tehran, raising fears that liquefied natural gas shipments will remain stalled. While oil tankers have partially bypassed the blockage at the Strait of Hormuz through ship-to-ship transfers, LNG infrastructure lacks such flexibility. This logistical bottleneck leaves Europe and Asia scrambling for a diminishing pool of available cargoes as winter approaches.

Energy markets face additional pressure from Qatar’s decision to extend its force majeure on LNG deliveries through October. Compounding the supply crunch is the fact that European storage levels are at their lowest point in two decades. With the Strait of Hormuz effectively closed to LNG traffic, the competition for non-Middle Eastern supply has intensified, keeping prices on an aggressive upward trajectory.