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European gas benchmark rises above €60 as Middle East supply fears grow
The Dutch benchmark briefly topped €60/MWh, while European gas storage is under 54% full versus 64% at the same point last year, according to ICIS.
Europe’s natural gas market tightened as fears over Middle East escalation raised concerns about supply shortages this winter. The Dutch natural gas benchmark briefly rose above €60 per megawatt hour on Monday, near early-incident peaks from the US-Iran conflict, after the US expanded its aerial offensive and Iran retaliated with strikes on Bahrain and Kuwait, according to the Guardian Business.
Analysts at Independent Commodity Intelligence Services (ICIS) said the conflict is delaying the expected recovery of Qatari LNG exports during the summer storage season, a key period for refilling European reserves. ICIS also warned that meeting the EU’s 80% storage target could become more expensive in a cold winter, noting that while security of supply remains achievable, the cost rises sharply as prices stay elevated.
ICIS added that with storage now less than 54% full, compared with 64% at the same point last year, the region may face higher restocking bills. It said that if gas stays around €60/MWh it could imply potentially costly state intervention, and that modeling suggests storage could still reach targets by late November.
The report also pointed to LNG shipping disruptions, saying only 26 LNG cargoes have crossed east out of the Gulf since the conflict began on 28 February, versus a usual 90 to 100 each month. ICIS cut its forecast for global LNG supply this year from 441 million tonnes to 431 million tonnes, and highlighted risks to shipping through the Strait of Hormuz, which carried about 20% of the world’s oil and gas before the conflict began.
Latest closeNat gas $2.895 ▼1.0%