European Gas Prices Hover at 2022 Highs

European natural gas prices hovered above €82/MWh on Tuesday, their highest level since late 2022, amid intensifying disruptions around the Strait of Hormuz and concerns over still-below-normal gas inventories. The strait remains closed to most commercial traffic amid ongoing military conflict and security threats, while diplomatic efforts to secure its reopening have stalled, raising fears that disruptions to shipments could persist. LNG tanker traffic through the Strait has fallen sharply, tightening global supplies and intensifying competition with Asia and other buyers for available cargoes. Meanwhile, ongoing maintenance at Norwegian gas facilities is also adding another layer of uncertainty to Europe’s winter supply balance. Europe’s gas storage levels stand at around 68% of capacity, nearly 17 percentage points below the seasonal norm, when inventories would usually be close to maximum capacity.