EUROPE GAS-European gas prices close higher on disruption to LNG shipments

By Susanna Twidale

LONDON, March 2 (Reuters) - Benchmark European wholesale gas prices closed around 35-40% higher on Monday, after major liquefied natural gas (LNG) exporter Qatar Energy said it had halted production due to attacks in the Middle East and cargo standstill via the Strait of Hormuz raised concerns about how long the disruption will last.

Qatar, soon to cement its role as the world’s second largest LNG exporter after the United States, plays a major role in balancing both Asian and European markets' demand of LNG.

A source with knowledge of the matter told Reuters QatarEnergy is set to declare force majeure on shipments of LNG.

"The decision by Qatar to halt LNG production is likely precautionary as gas is a very flammable hydrocarbon. Should a drone strike a facility that is flowing LNG/natural gas, the results would be catastrophic...As for duration, it would be fair to assume that such a force majeure will last for as long as Iran is retaliating and ships are not moving through the Strait of Hormuz," said Scott Shelton, energy analyst at British inter-dealer broker TP ICAP.

The Dutch front-month contract at the TTF hub, seen as a benchmark price for Europe TFMBMc1, was up around 35%, at 43.30 euros per megawatt hour (MWh), (around $15.25/mmBtu), by closing trade, ICE data showed, having surged to almost 50% higher in earlier trade.

Europe has increased imports of LNG over the past few years as it seeks to phase out Russian gas following Russia’s invasion of Ukraine. While it has become increasingly dependent on U.S. LNG shipments, it sourced 6% of its LNG from Qatar in the third quarter of 2025, the latest EU data show.

Around 20% of the world’s LNG transits through the Strait of Hormuz and a prolonged suspension or full closure would increase global competition for other sources of the gas, driving up prices internationally.

Benchmark Asian LNG prices jumped almost 39% on Monday morning with the S&P Global Energy Japan-Korea-Marker (JKM), widely used as an Asian LNG benchmark, at $15.068 per million British thermal units (mmBtu), Platts data showed.

"In a scenario where flows halt for one month, we think it is likely that TTF and JKM could approach 74 euros/MWh ($25/mmBtu)—130% above current levels—a threshold that triggered large natural gas demand responses during the 2022 European energy crisis," said analysts at Goldman Sachs.

A longer disruption lasting more than two months could lift TTF prices to more than 100 euros/MWh, they added.

The British April contract NGLNMJ6 was up 32.15 pence at 110.72 pence per therm, ICE data showed.

Europe is also relying on LNG imports to help fill its gas storage sites which have been depleted over the winter and are currently around 30% full, the latest data from Gas Infrastructure Europe showed.

A European Commission spokesperson told Reuters on Monday that the EU's gas coordination group, which includes representatives from member state governments will meet on Wednesday to assess the impact of the widening conflict in the Middle East.