European natural gas prices will remain 40% higher than previous projections through 2027, according to HSBC Holdings PLC. The bank's analysis warns that the Iran war and potential closure of the Strait of Hormuz will trigger a significant supply shortfall, reshaping energy markets across the continent.

The report indicates that what was once considered a temporary price spike has now become a structural market shift. HSBC's projection for 2026 shows prices remaining substantially above pre-conflict levels, suggesting European businesses and consumers face years of elevated energy costs.

This prolonged price pressure could force European industries to accelerate energy transition investments or relocate production to regions with more stable energy supplies. The analysis underscores how geopolitical conflicts are creating lasting economic impacts far beyond traditional war zones, fundamentally altering Europe's competitive position in global markets.