European Natural Gas Surges Above €80/MWh to Highest Since December 2022 as Hormuz LNG Disruptions Intensify

European natural gas prices rose above €80 per megawatt-hour on Thursday September 10, the highest level since December 2022, amid rising concerns over the region's gas supply outlook, according to Trading Economics. European gas inventories remain below historical norms as escalating attacks in the Middle East continue to disrupt LNG shipments through the Strait of Hormuz, a critical route handling roughly 20 percent of global gas flows, mainly from Qatar. Iran said it had struck more than a dozen vessels attempting to pass through the strait and warned that it would step up attacks if Washington continued strikes on its territory, heightening fears of deeper and more prolonged supply disruptions. European natural gas prices climbed to €80/MWh on Wednesday September 9, extending gains for a fourth session to their highest level since December 2022, as continuing strikes in the Middle East heightened concerns over further supply disruptions.

Meanwhile, maintenance in Norway and lower Algerian flows to Italy are also limiting pipeline supplies to Europe, according to Trading Economics. These supply risks come as Europe nears the end of its summer storage injection season, threatening to further intensify competition for global gas supplies during the winter. US natural gas prices fell to $2.83 per million British thermal units on September 11, down 0.12 percent from the previous day, as inventories stood 4.8 percent above the five-year average, reinforcing concerns over ample domestic supply, according to Trading Economics. Rising European and Asian demand for US LNG, as buyers seek alternatives to disrupted Middle Eastern supplies and prepare for winter, is providing additional underlying support to the market. Gas deliveries to major LNG export facilities increased, with flows to the nine major LNG export plants rising to 18.1 billion cubic feet per day in September from 17.2 bcfd in August.

This matters because Europe's gas supply security is now directly tied t

Sources

Sources: Trading Economics, Bloomberg (via earlier reporting). Price data verified through multiple market data providers. Gas flow data from EIA and Trading Economics market commentary.