Energy prices surge after LNG carrier attacked near Hormuz
European natural gas and oil benchmarks climbed on Tuesday following reports that an LNG carrier came under attack near the Strait of Hormuz, intensifying concerns over energy security through the vital waterway amid fragile diplomatic efforts to prevent maritime violence.
European natural gas futures rose more than 4.5% on Tuesday to reach €46 ($52.5) per megawatt-hour, while international benchmark Brent crude climbed 1.2% toward $73 per barrel, after reports emerged that a liquefied natural gas carrier was attacked near the Omani coast while exiting the strategic Strait of Hormuz.
Benchmarks climb on supply fears
The price gains marked a sharp reversal from the previous session’s losses, with traders pricing in heightened risks to energy shipments through the chokepoint responsible for roughly one-fifth of global oil and LNG trade. Weather forecasts indicating another spell of extreme heat across Northwest Europe added to bullish sentiment, as increased air-conditioning use is expected to drive power demand higher during the summer months.
Iranian media reports vessel 'disregarded warnings'
Iranian state television IRIB reported that the vessel came under attack after allegedly disregarding warnings, though the broadcaster did not directly claim responsibility for the assault. The incident occurred as at least eight Japan-linked vessels exited Hormuz via a route near Iran, including five supertankers each capable of carrying approximately 2 million barrels of crude, according to shipping reports.
European storage levels lag behind 2024
The attack renewed questions over Europe’s ability to rebuild gas inventories before the winter heating season, with storage facilities currently around 49% full compared with nearly 60% at the same period last year. Despite Tuesday’s gains, crude prices remained close to their lowest levels since late February as expectations of rising global supply continued to weigh on the market, prompting Saudi Aramco to cut the price of its Arab Light crude for Asian buyers next month and widen its discount to the regional benchmark.
US-Iran maritime agreement under scrutiny
The incident raised fresh questions over the durability of the US-Iran agreement aimed at preventing attacks in the Strait of Hormuz, one of the world’s most important energy transit routes. Diplomatic efforts to secure the waterway have faced repeated setbacks as regional tensions persist, with Tuesday’s price volatility underscoring market sensitivity to any disruption in the critical passage linking Middle East producers to global consumers.
Comments you share on our site are a valuable resource for other users. Please be respectful of different opinions and other users. Avoid using rude, aggressive, derogatory, or discriminatory language.