European gas prices surge after Qatar halts LNG production amid Middle East tensions

LONDON: European wholesale gas prices surged sharply on Monday after QatarEnergy, one of the world’s leading liquefied natural gas (LNG) exporters, announced it had halted production following escalating attacks in the Middle East.

Analysts warned that prolonged disruption could further push prices higher, with global competition for LNG intensifying across both Asian and European markets.

A source familiar with the matter told HUM News that QatarEnergy is expected to declare force majeure on LNG shipments, effectively suspending contractual obligations due to the ongoing conflict.

Europe has increased LNG imports in recent years as it seeks to reduce reliance on Russian gas following Russia’s invasion of Ukraine. About 20 per cent of the world’s LNG passes through the Strait of Hormuz, and any extended suspension or closure would increase competition for alternative supplies, sending prices soaring internationally.

“Disruptions to LNG flows would reignite competition between Asia and Europe for available cargoes,” said Massimo Di Odoardo, Vice President of Gas and LNG Research at Wood Mackenzie.

Benchmark Dutch TTF gas prices jumped almost 50 per cent to 47.935 euros per megawatt hour (MWh), or roughly $16.40 per million British thermal units (mmBtu), by mid-afternoon London time, according to ICE data. Prices were already up around 25 per cent earlier in the day but surged further after QatarEnergy’s production halt.

In Asia, LNG prices also spiked, with the S&P Global Energy Japan-Korea Marker (JKM) rising nearly 39 per cent to $15.068 per mmBtu, Platts data showed.

“If LNG and gas markets start to price in an extended disruption of Qatari supply, TTF could spike to 80–100 euros/MWh ($28–35/mmBtu),” warned Warren Patterson, Head of Commodities Strategy at ING.

In the UK, the April gas contract rose 43.96 pence to 122.53 pence per therm.

Europe is particularly reliant on LNG imports to replenish gas storage sites depleted over the winter, which currently remain around 30 per cent full, Gas Infrastructure Europe reported.

A European Commission spokesperson told HUM News that the EU’s gas coordination group, which includes representatives from all member states, will meet on Wednesday to assess the impact of the Middle East crisis on gas supply. The group monitors storage levels, ensures supply security, and coordinates response measures during energy disruptions.

In the European carbon market, benchmark carbon prices fell slightly, with the CFI2Z contract down 1.10 euros at 69.17 euros per metric ton.

As the Middle East conflict intensifies, energy analysts warn that volatility in global gas markets could continue, affecting both industrial consumers and households across Europe and Asia.