European gas prices rise due to conflict between Israel and Iran

The wholesale price of gas for the European market climbed today to its highest level since early April, approaching 40 euros (roughly CZK 990) per megawatt-hour (MWh). The increase is driven by the escalation of the conflict between Israel and Iran and its potential impact on gas supplies.

The price of the key front-month gas futures contract at the virtual Title Transfer Facility (TTF) trading hub in the Netherlands was up more than four percent shortly before 13:30 CEST, trading close to 39.5 euros per MWh.

Iran has already curtailed production at the vast South Pars natural gas field as a result of its conflict with Israel. There are also concerns that Tehran could block shipping in the Strait of Hormuz, through which around 20 percent of global liquefied natural gas (LNG) supplies pass, Reuters reported.

"Oil prices in the gas market have risen significantly due to increased tensions in the Middle East. The market fears that the situation could affect LNG supplies to Europe. This could happen if Iran closes the Strait of Hormuz," analysts at Mind Energy said in their regular morning market update.