FX.co ★ European Gas Remains Near Multi-Year Highs

European natural gas prices slipped below €65 per MWh on Friday but remained close to their highest level since January 2023, as the deadlock in the US–Iran confrontation clouded the outlook for LNG supplies from the Gulf. Tensions over the Strait of Hormuz have escalated into a new phase of economic pressure, unnerving the market.

Traders are increasingly concerned about Europe’s readiness for the coming winter. A maritime blockade has left Qatari LNG cargoes stranded, forcing European utilities into fiercer and more expensive competition with Asian buyers for the limited volumes still available. At the same time, heatwave-driven demand for air conditioning is curbing injections of gas into storage.

Gas storage sites in Europe are only 62% full, the lowest seasonal level in data going back to 2009, leaving the region with a narrowing window to rebuild inventories before the heating season begins. Even so, the European Commission has insisted that the bloc’s gas supplies are not in immediate danger. Benchmark prices are up more than 5% over the week.