Strong increases in gas prices in Europe. The reason is the conflict in the Middle East

Gas prices in Europe are increasing by 20%. after an earlier increase of 25%, the strongest since August 2023. This is a reaction to investors' concerns about fighting in the Middle East, which may seriously disrupt global energy supplies, brokers say.

Benchmark gas contracts in Amsterdam (ICE Entawex Dutch TTF) are at EUR 38.44 per MWh, up 20%, after previously increasing by 25%.

Markets are seeing sharp increases in gas prices after the United States fired missiles at targets in Iran on Saturday, calling on the local population to overthrow the Islamic regime.

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Tehran responded with a wave of attacks on Israel, as well as on US bases and other targets in countries such as Saudi Arabia, Qatar, the United Arab Emirates, Kuwait and Bahrain.

Fighting in the Middle East has raised concerns among investors about possible major disruptions in global energy supplies.

The situation in the Strait of Hormuz is particularly in focus.

At least 150 tankers, including those carrying crude oil and liquefied natural gas (LNG), were stranded in the Persian Gulf after Saturday's US and Israeli attack on Iran and Tehran's warnings about the Strait of Hormuz.

Several dozen ships are waiting on the other side of the Iranian-controlled strait.

In the Persian Gulf, tankers massed in open waters off the coast of major oil producers including Iraq and Saudi Arabia, as well as LNG exporter Qatar.

Asian countries import most of their LNG from the Middle East, and any disruptions in gas supplies from this region would increase competition for alternative sources of gas supplies, raising prices of this fuel around the world, including in Europe.

Analysts point out that Europe is particularly vulnerable because its gas supplies are extremely low and the region must import large volumes of LNG this summer to make up for the shortage before next winter. (PAP Business)

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