European and UK gas prices have jumped 15% since 10th June amid escalating conflict between Israel-Iran and risks through the Strait of Hormuz. Headline news have seen prices climb higher this morning with both the NBP and TTF at their highest levels since early April. A lot of the increases are sentiment driven however there have been some impacts on the gas markets already.
Israel has shut production at two if its fields (Chevron-operated Leviathan and Energean’s Karish) and halted exports to Egypt and Jordan. Concern comes from increasing global LNG demand as replacement for those flows. In addition to this Iran partially suspended operations at South Pars gas field over the weekend when it was struck by missiles. The gas field is the largest in the world, shared with Qatar who remain the third largest LNG exporter. The close proximity fuelled concerns however Qatar has since confirmed gas production is steady and supply is proceeding normally. Finally, Qatar has asked LNG vessels to wait outside the waterway until they’re ready to load amid rising tensions in the region. While delays in shipments are not expected for now, prices reacted strongly as the Strait of Hormuz is a major route for energy supplies, with around 20% of global LNG passing through it.
With geopolitics back into the mix prices are expected to remain volatile especially with Europe’s increasing reliance on LNG markets. The Continent still needs more LNG in the coming months to replenish stockpiles after they dropped to a three-year low this winter.
In other news the European Commission yesterday proposed a legally binding ban on EU imports of Russian gas and LNG by the end of 2027, using legal measures to ensure the plan cannot be blocked by EU members Hungary and Slovakia.
- Imports would be banned from January 1, 2026, under any Russian pipeline gas and LNG contracts signed during the remainder of this year.
- Imports under short-term Russian gas deals – defined as those lasting less than one year – signed before June 17, 2025, would be banned from June 17 next year.
- Imports under existing long-term Russian contracts would be banned from January 1, 2028, effectively ending the EU’s use of Russian gas by this date, the Commission said.
EU energy commissioner Dan Jorgensen said on Monday that the measures were designed to be legally strong enough for companies to invoke the contractual clause of “force majeure” – an unforeseeable event – to break their Russian gas contracts.
Copyright © 2025 Energy Live News LtdELN