European Gas Prices Skyrockets as Iran Closes Strait of Hormuz

(MENAFN) European natural gas prices more than doubled on Tuesday after coordinated US and Israeli military strikes on Iran severed shipping through the Strait of Hormuz and forced QatarEnergy to shut down production at two of its most critical liquefied natural gas facilities — triggering the most severe shock to global gas markets since Russia's invasion of Ukraine in 2022.

At the Dutch Title Transfer Facility (TTF) — Europe's most actively traded gas hub — April futures surged to €65.50 ($76) per megawatt-hour as of 1720 GMT, compared with a closing price of €31.95 per megawatt-hour on Feb. 27, the day before hostilities erupted. On a session basis alone, prices were up approximately 47%.

The trigger was twofold. Iranian drone strikes on energy infrastructure at Ras Laffan Industrial City and Mesaieed — Qatar's twin pillars of LNG production — prompted QatarEnergy to suspend output at both sites, citing security conditions. Simultaneously, commercial vessel traffic through the Strait of Hormuz ground to a near-total standstill. The waterway is the transit corridor for roughly 20% of global LNG exports, with Qatar alone accounting for virtually all of its shipments to international buyers through the route.

Qatar supplies approximately one-fifth of the world's LNG export capacity, meaning the simultaneous shutdown of Ras Laffan and Mesaieed has removed a substantial and near-irreplaceable volume from an already strained market.

QatarEnergy's force majeure declaration compounded the disruption, injecting deep uncertainty for buyers holding long-term supply contracts and raising the likelihood that many will be forced to compete for scarce spot market cargoes at sharply elevated prices.

With the Hormuz corridor effectively closed, a fierce contest for alternative LNG supply is expected to unfold between European and Asian importers, with producers in the United States and Australia positioned as the primary alternative sources — though neither can fully offset the loss at short notice.

Europe enters the crisis from a position of vulnerability. EU gas storage sits at approximately 30% capacity — well below the levels recorded at the same point last year — leaving the bloc with limited buffer against prolonged supply disruption.

In response, the European Union's Natural Gas Coordination Group is scheduled to convene on March 4 to assess the full scope of the escalation and weigh contingency measures.

The market's reaction reflected the depth of the alarm. Gas prices, already sensitive to geopolitical risk, have now more than doubled in days — a trajectory that analysts warn could intensify inflationary pressures across the continent and strain household energy costs heading into the spring.

MENAFN04032026000045017169ID1110815709