European natural gas futures surge amid Middle East tensions

European natural gas futures rose 2% to over €40 per megawatt-hour, driven by concerns over Middle East tensions potentially disrupting energy supplies, especially if Israel-Iran hostilities escalate.

European natural gas futures surge amid Middle East tensions

Investors are watching the risk of supply interruptions, particularly through the Strait of Hormuz, a key route for LNG and oil shipments. A fresh military offensive by Israel against Hezbollah in Lebanon and rising geopolitical tensions have increased market uncertainty. Despite Europe’s gas storage being 95% full and rising LNG imports, prices remain near levels last seen in December 2023 due to regional supply risks and an expected cold snap, with major cities like London, Paris, and Berlin set to experience below-normal temperatures next week. Investors brace for supply disruptions Norwegian gas output has returned to normal after maintenance, contributing to supply stability, but the market remains sensitive to further geopolitical developments and weather patterns heading into the heating season.