European natural gas prices surged on Monday as the escalating conflict in the Middle East caused Qatar to stop LNG production at the world’s top plant.
The benchmark European gas price, traded on the Dutch TTF hub, rose by as much as 45% to around €46 per megawatt-hour in early afternoon trading.
UK natural gas prices also surged, with the NBP benchmark climbing sharply in tandem with continental markets.
High market volatility has driven sharp minute-by-minute swings.
The sharp increase follows US and Israeli strikes on Iran, which have heightened tensions in a region critical to global energy flows.
QatarEnergy announced early Monday afternoon that it had halted liquefied natural gas production linked to the giant North Field gas reservoir following an attack on its facilities, but gave no further details as to the extent of the impact on operations.
A large proportion of the world’s energy supply comes from the Middle East, and before the announcement from Qatar, the seaborne oil and gas transport was at the centre of market fears.
The Strait of Hormuz, a narrow maritime passage largely controlled by Iran, is one of the world’s most important energy chokepoints for oil and LNG, including exports from Qatar.
Iran has moved to block traffic through the strait following the strikes, raising concerns about supply interruptions.
Any sustained disruption could affect LNG shipments from Qatar, which supplies around 12% to 14% of Europe’s LNG imports.
Source: euronews
