European Gas Prices Soar to 3.5-Year High as Gulf LNG Disruptions Bite

Europe’s benchmark natural gas price jumped 4.5% on Wednesday, closing at $89.10 per megawatt-hour. This marks the highest level in over three and a half years. The sharp increase is driven by severe, ongoing disruptions to liquefied natural gas (LNG) supplies from the Persian Gulf. These supply problems are squeezing the European market, which relies heavily on imported gas to heat homes and power industry. Traders are reacting to the reality that Gulf shipments, a key source of non-Russian gas, will not return to normal levels anytime soon. As a result, buyers are bidding up the price of available cargoes, pushing the benchmark contract to a level not seen since early 2022. The price surge puts renewed pressure on households and businesses across the continent, raising concerns about higher energy bills ahead of the winter season.