The European benchmark Dutch TTF gas price jumped above €70 per megawatt-hour on Monday. The front-month contract was up more than 5% after midday in Europe, as uncertainty over LNG supplies from the Gulf put upward pressure on prices.
On Sunday, US forces struck Iranian rocket launchers near the Strait of Hormuz, prompting Iran to retaliate by firing missiles at US forces in Jordan. The escalation threatens to cause further disruption to liquefied natural gas (LNG) exports, as the Strait of Hormuz, through which roughly one-fifth of global LNG trade normally passes, remains effectively closed.
The disruption comes at a time when LNG deliveries are critical for Europe as it refills its gas storage facilities ahead of winter.
EU gas storage facilities were 64.7% full, according to data from Gas Infrastructure Europe (GIE), leaving inventories below historical levels for this time of year.
High market prices have slowed the refilling process in many countries, raising concerns that the Netherlands and Germany could miss their gas-storage targets of 80% and 70%, respectively, by the 1 November deadline.
