Middle East war sends natural gas prices soaring, raising growth shock risk for Europe and Asia

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A prolonged surge in natural gas prices triggered by the ongoing war in the Middle East risks denting European growth and hitting some Asian economies hard, analysts have warned.

Global gas prices have soared this week amid fears of a lengthy disruption to energy flows through the Strait of Hormuz — a key shipping route running between Oman and Iran that handles about one-fifth of global LNG trade — as the Iran conflict escalates.

Dutch Title Transfer Facility (TTF) futures, Europe’s benchmark gas contract, rose 35% on Tuesday to more than 60 euros ($69.64) per megawatt-hour. On the week, prices are around 76% higher.

The Northeast Asia LNG benchmark, the Japan-Korea-Marker (JKM), which captures deliveries to Japan, Korea, China and Taiwan, reached a one-year high, and was last seen around 43 euros per megawatt-hour. U.K. natural gas was also sharply higher.