European Gas Prices
European natural gas prices have surged by 25% following the launch of a U.S. and Israeli military operation against Iran on February 28th. Codenamed 'Lion's Roar', the operation has caused major disruptions to shipping in the Strait of Hormuz, raising immediate threats to global energy supplies. Gas futures in the Netherlands reached a record €38.72 per megawatt-hour, marking the sharpest single-day increase since August 2023. This spike underscores Europe's continued vulnerability to supply shocks despite efforts to diversify its energy sources.
Importance of the Strait of Hormuz
The Strait of Hormuz is a critical chokepoint for global liquefied natural gas (LNG) exports, handling roughly one-fifth of the world's total volume. In 2025, approximately 13 million barrels of oil transited the strait daily. Following the escalation of the conflict, around 150 tankers were forced to anchor in the Persian Gulf. This has heightened alarm among exporters, including those from Qatar and the United Arab Emirates, who are now urgently rerouting or delaying shipments. Israel has also temporarily halted a portion of its own gas production, further tightening market conditions.
U.S. President Donald Trump has stated that the bombing campaign against Iran could continue for another 4-5 weeks. Amid the instability, analysts at Goldman Sachs warn that a full, month-long blockade of the strait could more than double gas prices in Europe.
“The longer shipping restrictions persist, the higher prices will go,” noted Tom Marzec-Manser, Head of Gas and LNG at Wood Mackenzie.
In response to these events, European Union nations are being compelled to actively purchase fuel to prepare for the next winter. Furthermore, Egypt is seeking additional gas supply sources, while the logistical disruptions are intensifying competition with Asian nations for alternative supplies. These factors indicate that the European gas market will remain under significant pressure in the coming months.
The sharp price increase triggered by military action in the region highlights the persistent fragility of energy markets to geopolitical shocks. Disruptions in the Strait of Hormuz can have far-reaching consequences for global energy supply, already causing rerouting and delivery delays. In this situation, EU countries must take urgent measures to ensure energy security, including exploring alternative supply routes to build reserves for the winter season.