European Gas Prices Surge as US-Iran Conflict Closes Hormuz

European natural gas prices reached their highest levels since early 2023 on Monday, with the Dutch TTF benchmark exceeding €70 per megawatt-hour. The price spike follows a military escalation in which the United States struck Iranian rocket launchers near the Strait of Hormuz, prompting Iran to launch retaliatory missile attacks against U.S. forces in Jordan.

The conflict has effectively closed the Strait of Hormuz, a critical chokepoint for one-fifth of global LNG trade. This closure has disrupted supplies from Gulf producers, leading QatarEnergy to extend a force majeure suspension of LNG deliveries to the Italian utility Edison until early November.

European gas storage levels currently sit at 64.7%, which is below the historical seasonal average. Industry analysts warn that prolonged instability could trigger a bidding war between European and Asian markets, potentially driving wholesale prices toward €100 per megawatt-hour.