European gas prices started the week with an increase of more than 20 percent, as tanker traffic in the Strait of Hormuz, which is critical for global energy supply after the joint attacks of the USA and Israel on Iran, came to a largely halt.
Located at the mouth of the Persian Gulf, the Strait of Hormuz connects oil and liquefied natural gas (LNG) production in the Middle East to world markets via the Arabian Sea and Indian Ocean.
Approximately 20 percent of the world’s LNG exports are transported through this strategic passage. Almost all LNG exports of Qatar, one of the largest LNG exporters, reach its international customers through the Bosphorus.
While buyers in Asia, especially China, constitute the majority of LNG trade passing through the Strait of Hormuz, possible supply disruptions in global gas markets put upward pressure on prices, especially in Europe.
The occupancy rate in Europe’s gas tanks falling below 30 percent also increases prices. The decrease in occupancy rates in gas tanks increases the amount of LNG that Europe needs to supply from international markets.
Gas prices in Europe rose over 20 percent at the opening, as commercial ship passages in the Strait of Hormuz came to a virtual halt following the joint attacks of the USA and Israel against Iran. This was the biggest increase in prices since August 2023.
At TTF, the Netherlands-based virtual natural gas trading point with the most depth in Europe, the gas price per megawatt hour in April futures contracts is traded at 39.2 euros as of 10.41 Turkish lira.
Prices closed at 31.95 euros per megawatt-hour on February 27, before the attacks.
European gas prices thus reached the highest level seen since February 18, 2025. On this date, gas prices were at 38.7 euros per megawatt-hour.
