Tensions in the Gulf Spike European Gas Prices

Escalating tensions in the Gulf, marked by tanker attacks, have significantly raised European and Dutch gas prices. The situation has been compounded by high oil prices and Qatar's invocation of force majeure, impacting global LNG supply. Europe's low gas reserves further contribute to increased costs for refilling inventories.

Increased tensions in the Gulf, spurred by tanker attacks, have caused a significant rise in British and Dutch wholesale gas prices on Thursday morning. With reports of prolonged disrupts in liquefied natural gas supplies, investors are wary of regional instability.

The benchmark Dutch front-month contract at the TTF hub rose 2.41 euros to 52.40 euros per megawatt hour (MWh), while the British front-month contract increased by 5.86 pence to 133.12 pence per therm, according to ICE data. These increases are driven by near standstill shipping through the Strait of Hormuz due to ongoing U.S. and Israeli strikes on Iran.

Europe's reliance on LNG is underscored as Qatar, a leading producer, declares force majeure, tightening global supply. European gas stores are just 29.3% full, and prices are predicted to impact refilling costs amid further market rises, according to energy analysts.

(With inputs from agencies.)