European Gas Benchmark Hits €80 as Middle East Tensions Spike
Dutch wholesale gas prices surged past €80/MWh for the first time since January 2023, driven by escalating Middle East conflict.
European natural gas markets are feeling the heat from the escalating conflict in the Middle East. On Wednesday afternoon, the benchmark Dutch wholesale gas price climbed above €80 per megawatt hour (MWh) for the first time since January 2023, according to trading data from ICE.
The contract touched an intraday high of €80.985/MWh before settling back to trade at €78.985/MWh by 1434 GMT. The surge comes as geopolitical risk in the energy-rich Gulf region intensifies.
Iran announced on Wednesday that it had attacked 10 ships near the strategic Strait of Hormuz. This follows a statement from the United States that it had sunk five Iranian oil tankers in the area. The Strait of Hormuz is a critical chokepoint for global energy supplies, and any disruption there has immediate repercussions for commodity prices worldwide.
The price spike underscores how vulnerable European energy markets remain to supply shocks, even as the continent has worked to diversify its sources away from Russian pipeline gas. Traders are now closely watching for any further escalation that could threaten the flow of liquefied natural gas (LNG) through the region.