European natural gas prices jumped as much as 25% — the biggest increase since August 2023 — after tanker traffic through the Strait of Hormuz largely halted over the weekend. The narrow waterway, which carries about a fifth of global LNG exports, became a focal point as conflict between the US, Israel, and Iran intensified. Benchmark futures surged as traders braced for potential supply disruptions.

Europe faces heightened vulnerability despite nearing winter's end, with unusually low fuel inventories requiring substantial LNG imports this summer to prepare for next heating season. Wood Mackenzie analysts warn that prolonged closure of the strait could push prices significantly higher. The situation marks the most serious threat to gas markets since Russia's invasion of Ukraine four years ago, with Asian countries typically buying most Middle East LNG but any disruption increasing global competition for alternative supplies.

Goldman Sachs estimates a month-long halt to Hormuz shipping could more than double European gas prices, creating significant market shock after benchmark futures dropped 19% last month due to mild weather and ample supply. Dutch front-month futures traded 21% higher at €38.72 per megawatt-hour in Amsterdam. The conflict has already prompted Qatar to suspend maritime navigation and Israel to temporarily close gas-producing capacities, forcing major importer Egypt to seek additional LNG cargoes.