Benchmark futures rose as much as 2.4% on Monday, June 16 to the highest since early April, after jumping 4.8% on Friday, June 13. Open hostilities between Israel and Iran entered a fourth day with no sign of easing, stoking fears of a broader conflict in the energy-rich region.
For gas traders, the biggest concern is that a further escalation could disrupt shipments through the Strait of Hormuz, a key waterway for seaborne supplies. While physical delivery of liquefied natural gas doesn’t currently appear to be affected, any interruption would strain the market at a crucial time in Europe’s stockpiling season.
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Tensions between the two long-time adversaries flared into direct conflict on June 13, when Israel launched surprise attacks on Iranian military and nuclear sites. Since then, Israel’s campaign has underscored its air superiority and exposed the constraints facing Tehran’s ability to respond effectively.
Israel launched an attack on the South Pars gas field, forcing the halt of a production platform, following last week’s strikes on nuclear and military targets. So far, critical crude oil exporting infrastructure has been spared and there’s been no blockage of the Strait of Hormuz.
Traders in Europe are also watching for any further disruptions to exports from Norway, the region’s biggest supplier of piped gas, as key facilities undergo seasonal maintenance. That comes as the weather warms across much of the continent, boosting energy demand for air-conditioning.
On the regulatory side, the European Commission will propose a measure on June 17 to end the European Union’s reliance on Russian pipeline and LNG supplies by the end of 2027. The regulation, which can be approved with qualified-majority backing, will gradually ban Russian gas imports starting next January, and prohibit services to Russian companies at EU LNG terminals.
Dutch front-month futures, Europe’s gas benchmark, rose 1.89% to €38.61 a megawatt-hour at 11:09 am in Amsterdam.
