European Gas Markets Face Renewed Strain as US-Iran Escalation Threatens Strait of Hormuz Transit
European gas markets have returned to a state of heightened anxiety following military escalation between the United States and Iran, which has brought navigation disruptions in the strategic Strait of Hormuz back into sharp focus.
The renewed tension comes at a critical juncture, as Europe grapples with one of its weakest gas storage refill seasons in years, coupled with resurging Asian competition for global liquefied natural gas (LNG) cargoes and delays in bringing new supply capacity online.
Although a memorandum of understanding (MoU) signed between Washington and Tehran in June briefly raised hopes for the reopening of the Strait of Hormuz and the normalization of regional energy exports, the resumption of military clashes has injected fresh uncertainty into global markets.
In response to the escalating risk, European benchmark gas prices surged back above €60 per megawatt-hour (MWh)—marking a jump of more than 50% compared to levels recorded immediately following the June agreement.