European natural gas futures on the Dutch exchange have risen from 30 euros to over 50 euros per MWh following a week of conflict in the Middle East.

This price remains significantly below the 2022 crisis peak of approximately 340 euros. However, Laurent David, Secretary General of the International Group of Liquefied Natural Gas Importers (GIIGNL), warns of escalating tensions if the conflict persists.

"The gas market is less liquid than oil, and there are very few major supply sources," he noted. As of 7/3, no gas shipments had passed through the Strait of Hormuz, a maritime route that handles about 20% of global LNG traffic daily, equivalent to approximately 120 billion cubic meters annually. In Qatar, the world's largest LNG plant ceased operations early this week.

If prices continue to rise sharply, Europe will have limited options for response. Global LNG plants are operating near maximum capacity. Norway, the EU's largest internal gas supplier, is pumping gas at full capacity.

A floating LNG terminal in Wilhelmshaven, Germany. Photo: Reuters.

Experts warn of a potential "gas war" between Europe and Asia in the spot market, where cargoes are traded daily to the highest bidder. According to Kpler data, since 4/3, at least four LNG ships unexpectedly changed course. They were initially scheduled to dock in France, Belgium, or Spain after departing from Africa and the US, but subsequently diverted to Asia.

According to Ole Hvalbye, an analyst at SEB Research, the global market is expected to face a shortfall of approximately 7 million tons of LNG (equivalent to 9,7 billion cubic meters). Of this, Europe could experience a reduction of up to 5,5 million tons due to competitive pressure from Asia.

This situation would push gas prices in Europe above 60 euros per MWh. A prolonged shutdown of Qatar's Ras Laffan LNG complex poses a risk of global gas scarcity, similar to the 2022 crisis. Consequently, analysts do not rule out LNG prices reaching 100 euros per MWh.

Since 2022, Europe has stopped importing pipeline gas but continues to purchase Russian LNG. Currently, the US is the largest supplier, holding a 25,4% market share, while supplies from Qatar and the UAE account for under 10%.

However, on 6/3, Russian Deputy Prime Minister Alexander Novak stated that discussions had taken place with energy companies regarding the possibility of redirecting Russia's LNG supplies from Europe to India, Thailand, the Philippines, and China, dealing a new blow to Europe. "Our companies are considering opportunities without waiting for further restrictions from Europe," he declared.

European Union officials have stated there is no immediate risk of gas shortages and the situation remains under control. Yet, after a harsh winter, their reserves stand at only 29%, a significant decrease compared to the same period in 2024 and 2025.

Professor Thierry Bros at Sciences Po University in France highlighted that in 2022, Europe spent nearly 4,000 billion euros on energy subsidies. "That cannot be repeated. We will have to face a crisis without an 'airbag'," he said. If prices exceed 100 euros, some factories might have to close and relocate production to the US.

The EU's chemical, glass, and food industries report that rising gas prices are "beginning to have an impact," according to the Union of Energy-Intensive Industries (UCIS). Switching to oil is also not a viable solution, as its prices are also climbing.

Phien An (according to Reuters, Le Monde)