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European Natural Gas Surges Above €81/MWh to Highest Since December 2022, Hormuz LNG Disruptions and Norwegian Maintenance Tighten Winter Supply Outlook
Sources: Trading Economics September 10 and September 11 reports on European natural gas prices, inventory levels, and US LNG export flows. European Commission statement on winter gas security cited by Trading Economics. Foreign Policy September 9 report on Iranian shipping attacks. Hormuz LNG flow disruption data from Trading Economics and IEA.
European natural gas prices rose above €81 per megawatt-hour on Thursday September 10 before falling back slightly on Friday but remaining near their highest level since December 2022, according to Trading Economics. European gas inventories remain below historical norms at approximately 67 percent full as escalating attacks in the Middle East continue to disrupt LNG shipments through the Strait of Hormuz, which handles roughly 20 percent of global gas flows under normal conditions, primarily from Qatar. On Wednesday September 9, Iran claimed to have struck ten vessels near the strait in what Foreign Policy described as the largest known wave of attacks on shipping since the February outbreak of the US-Iran conflict. Fighting between the US and Iran has intensified over the past two weeks, with the ongoing blockade disrupting around 20 percent of global LNG flows. Norwegian pipeline maintenance and lower Algerian flows to Italy are further limiting supply to Europe as the continent nears the end of its summer storage injection season, according to Trading Economics. The European Commission stated there is no immediate risk to gas security this winter, but sustained disruptions to Gulf LNG supplies could further tighten global supply and intensify competition for cargoes during the winter heating season. US LNG demand from Europe and Asia has risen sharply as buyers seek to replace disrupted Middle Eastern supplies and replenish inventories ahead of winter, with gas flows to the nine major US LNG export plants increasing to 18.1 bcfd in September from 17.2 bcfd in August, according to Trading Economics data published September 9-10. The price surge follows months of elevated risk premium in energy markets, with Brent crude also climbing above $108 per barrel on September 11 as diplomatic efforts at Monday's Oman talks attempt to secure a framework for managing Hormuz shipping.