Middle East Tensions Push European Gas Prices Toward 2022 Peaks

The current price rally follows a 6 percent surge earlier this week, marking the highest levels seen since the 2022-2023 energy crisis. Saudi Arabia’s decision to shutter its East-West pipeline, designed to bypass the Strait of Hormuz, has compounded fears that global supply chains remain fragile. Europe enters the heating season with some of its lowest gas storage levels in two decades, exacerbated by diminished LNG shipments from Qatar and intensified competition for available cargoes across Asian markets.

ING strategists Warren Patterson and Ewa Manthey noted that the escalation in the Middle East has effectively neutralized expectations for an immediate increase in Persian Gulf LNG flows. With spot LNG prices in Northeast Asia climbing to 28.40 dollars per million British thermal units, the global market remains exceptionally tight. Despite the price signals theoretically incentivizing imports, analysts warn that Europe faces a difficult path to achieving its 75 percent storage target before the winter cold fully sets in.