FX.co ★ European Gas Jumps as Middle East Tensions Persist

European natural gas prices rose more than 3% on Monday to above €82/MWh, the highest level since December 2022, as tensions in the Middle East intensified. Saudi Arabia shut a key oil pipeline following drone attacks, and advances by Yemen’s Houthi forces heightened fears of further disruptions to global energy supplies. At the same time, a planned meeting between Iran and Gulf states, intended to discuss a possible agreement to reopen the Strait of Hormuz, was postponed.

Europe is facing difficulties replenishing its gas inventories, which remain below historical averages amid reduced LNG shipments from the Persian Gulf, particularly from Qatar. While the European Commission recently stated that there is no immediate threat to gas security this winter, a prolonged interruption to Gulf LNG exports could further tighten the global market. In that scenario, European buyers would likely be forced into more intense competition with Asian importers, potentially pushing prices even higher as heating demand increases.