The price of liquefied natural gas in north-west Europe surged to its highest level in more than three years, as the continent braces for tight winter supply due to the Middle East conflict. Buyers were paying $22.83 for 1mn British thermal units at the start of this week, more than double the price a year ago and the highest since January 2023, according to Argus Media. Prices on Tuesday dipped marginally to $22.23.

Disruption to flows through the Strait of Hormuz, which usually handles around a fifth of the world’s LNG supplies, has driven prices up since the start of the Iran war. Only eight LNG carriers exited the strait in July, compared with around three per day before the war. Shipments may be further curtailed after Iran’s Persian Gulf Strait Authority threatened fines or confiscation on Sunday.

European storage levels are lower than usual, with net injections averaging 3 terawatt hours per day in August, down from 3.6 TWh a year ago. Gas futures for coming months have stayed flat, giving traders little incentive to stock up now. As a result, European buyers are competing with Asia, pushing up prices there too. The Asian LNG benchmark gained 13 per cent in August, reaching $24.08 per MMBtu.

German storage is 50 per cent full, and analysts warn prices may rise further. Goldman Sachs noted European prices would need to rise above €100 a megawatt hour to discourage Asian LNG demand. Contracts traded around €66 per MWh on Tuesday.