Gas prices in Europe surged amid Qatar LNG plant shutdown
Kyiv • UNN
Natural gas prices in Europe rose by 34% due to uncertainty regarding exports from the world's largest LNG plant in Qatar. The plant's shutdown followed an Iranian drone attack.
Natural gas prices in Europe jumped by 34% amid uncertainty about how long exports from the world's largest LNG export plant in Qatar will be suspended and what impact this will have on global energy supplies, UNN reports, citing Bloomberg.
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Benchmark futures rose for a second straight day after China, the world's largest LNG importer, called on all parties to the conflict with Iran to ensure safe passage of vessels through the Strait of Hormuz. According to Bloomberg, senior gas company officials say China is pressuring Iranian officials to avoid actions that could disrupt Qatari gas exports.
The QatarEnergy plant, which accounts for about a fifth of global supplies, was shut down on Monday after an Iranian drone attack. Even before the shutdown, the expanding war in the Middle East had effectively closed the Strait of Hormuz, a key export route for Qatar.
European prices have risen by approximately 70% since trading closed on Friday, a price volatility not seen since the 2022 energy crisis. Europe is entering the final period of winter with depleted vast gas reserves, potentially exacerbating competition for global supplies during the upcoming inventory build-up season.
The situation threatens European reserves, as potential competition with other regions for LNG cargoes expands price spreads. European gas for the summer has become significantly more expensive than contracts for next winter, making fuel storage unprofitable for traders.
"We expect significant price volatility in the coming days as market participants assess the impact of lost production on their own supply portfolios," said Ross Wyeno, Deputy Director, Lead LNG Short-Term Analyst at S&P Global Energy. "The most aggressive buyers in the spot market in the short term are likely to be participants in the Asia-Pacific markets."
Traders are also questioning the severity of the attacks on the Qatari facility, which is one of the most significant unplanned outages in the industry's history.
The most important question for the market is how long the hostilities will continue. The US has sent conflicting signals about the duration of the war, with US President Donald Trump promising to do "whatever it takes."
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The scramble for alternatives has already begun: Taiwan and South Korea are among the countries looking for other sources, as gas vital for electricity is under threat. At the same time, Chinese gas buyers said the country is pressuring Tehran to keep the Strait of Hormuz open.
Analysts at Goldman Sachs Group Inc. raised their forecast for European gas prices in April 2026 to 55 euros per megawatt-hour from 36 euros. As most Qatari LNG is supplied to Asia, analysts expect spot prices in Asia to rise compared to European prices.
Fears of supply disruptions are also reflected in the options market. The implied volatility of European benchmark futures - a measure of the value of underlying derivative contracts - jumped to its highest level since summer 2023, indicating a prevailing bullish sentiment in the market, the publication writes.
"Security of supply may become an issue for Europe again," said Hubert Wiegeweno, CEO of Swiss MET Group.
Dutch front-month futures, the European benchmark for gas prices, rose 26% to 55.96 euros per megawatt-hour at 9:28 a.m. Amsterdam time.