European natural gas prices head for their largest weekly increase since the energy crisis, driven by ongoing Middle East conflict disrupting global supply outlooks. Benchmark futures eased slightly on Friday but remain set to close the week over 50% higher.
Middle East Tensions Escalate Supply Risks
The conflict in Iran reaches its seventh day without resolution, triggering concerns over supply competition and rising inflation, especially in Europe. Ship traffic through the Strait of Hormuz has nearly stopped, with dozens of loaded oil and gas tankers sheltering in the Persian Gulf. This vital route typically handles about one-fifth of global LNG supplies.
Europe’s Vulnerable Gas Market
Europe emerges from winter with depleted storage tanks, heightening the need for additional seaborne imports this summer. Buyers in the region will compete with Asian markets for limited cargoes if Middle Eastern flows falter.
Bernstein analysts, including Irene Himona, noted: “If you want an extra ship of US gas in Berlin, you have to bid high enough to divert it away from Tokyo.”
Price Levels and Volatility Spike
Current prices hover near €50 per megawatt-hour, far below the energy crisis peak above €300. Implied volatility in benchmark gas futures has more than quadrupled since early 2026, approaching levels last seen in summer 2023.
Dutch front-month futures, Europe’s key gas benchmark, dipped 3.5% to €48.98 per megawatt-hour by 8:36 a.m. in Amsterdam.
