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(Bloomberg) — European natural gas prices are poised for their biggest weekly gain since the energy crisis as the war in the Middle East continues to cloud the outlook for global flows.
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Benchmark futures paused their ascent on Friday, while still on track to end the week more than 50% higher. The war in Iran has entered its seventh day with no relief in sight, and disruptions to energy trade have sparked fears over intense competition for supplies and stronger inflationary pressures, particularly in Europe.
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The region’s gas market is particularly vulnerable as it’s emerging from winter with gas tanks depleted. That means that it will have to buy more seaborne cargoes this summer to refill them, vying with buyers in Asia for a limited pool of supplies if Middle Eastern flows don’t reach global markets.
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“If you want an extra ship of US gas in Berlin, you have to bid high enough to divert it away from Tokyo,” Bernstein analysts including Irene Himona wrote in a note.
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Prices are well below the records reached during the energy crisis, currently near €50 a megawatt-hour, compared to an all-time peak above €300 a megawatt-hour. Still, ship traffic in the Strait of Hormuz has ground to a near-complete halt, prompting dozens of fully laden oil and gas tankers to stay hunkered down within the Persian Gulf. The route normally accounting for about a fifth of the world’s LNG supplies.
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Meanwhile, implied volatility in Europe’s benchmark gas futures — a measure of the cost of the underlying options on the contracts — has more than quadrupled since the start of 2026 and now sits near the highest since summer 2023.
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Dutch front-month futures, Europe’s gas benchmark, nudged 3.5% lower to €48.98 a megawatt-hour by 8:36 a.m. in Amsterdam.
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