The start of September has seen a sudden upward surge in international natural gas prices. While headlines focus on crude oil crossing the symbolic $100 per barrel mark, gas prices have been rising faster, and are trading close to the oil price equivalent of $150 per barrel. The gas price rally should not come as a surprise.

Analysts have been fretting for months about the low levels of gas stocks in Europe. These need to be ramped up if Europe is to be ready for the winter heating season — and to secure supply, Europe must go head-to-head with Asian buyers. But the warnings went unheeded. “Forward” prices for gas this winter remained resolutely flat relative to summer prices.

So there was no incentive for traders to buy gas and pay to use storage for months, waiting on winter. Governments wanted to maintain a sense of calm. So what changed? The approach of winter has come into focus.

But perhaps more importantly, there is a growing awareness that LNG trade through the Strait of Hormuz has no obvious solution, and blockage could continue indefinitely. And the prospects for LNG look dimmer than for oil. The mindset has shifted from expectations of a return to market to concerns of extended outage.

Of all the many commodities disrupted by the Middle East conflict, LNG is among the hardest hit. Less than 10 per cent of prewar traffic is getting through. The sheer size of LNG vessels, the value of their shipments and the consequences of a strike are too high a risk.

Current prices are around $25 per MMBtu, and there are reports of options to buy LNG at above $30 per MMBtu. That is high and painful. It suggests households and factories will be subject to increasing bills.

But it is still a far cry from the $50 to $75 per MMBtu of the 2022 crisis.