European gas prices hit 3.5-year high as Hormuz disruptions persist

European natural gas prices climbed to their highest level in more than three and a half years on Tuesday as escalating tensions between the United States and Iran continued to disrupt liquefied natural gas supplies from the Gulf region, driving the benchmark contract to €76.7 per megawatt-hour and raising concerns about winter energy security across the continent.

Market rally

The benchmark European gas contract gained 4.5% to reach €76.7 ($89.1) per megawatt-hour by 1720GMT, according to exchange data. The rally underscored the mounting challenges of restoring normal commerce through the Strait of Hormuz — a vital conduit for global oil and LNG flows that has faced sustained interruptions since hostilities began.

Iran warnings

Tehran cautioned on Monday that regional energy infrastructure, including American oil and gas installations, faces heightened risks of further strikes as combat between Iran and the United States intensifies. The Islamic Republic has repeatedly signaled its readiness to target energy assets as the conflict extends into its third month, though no major attacks against US facilities have been confirmed in recent days.

Supply disruptions

Qatar, among the world's top LNG exporters, has effectively halted shipments and invoked force majeure on cargoes bound for European and Asian markets through the autumn amid persistent disruptions in the strategic waterway. The reduced LNG inflows have decelerated gas storage injections across Europe ahead of the heating season, leaving EU facilities approximately 66% full — beneath seasonal norms and exposing the market to potential shortages should temperatures drop below average.