The Strait of Hormuz crisis has exposed a dangerous blind spot in global energy markets, revealing that natural gas is far more vulnerable to disruption than oil. While oil market watchers have long feared a closure of the strategic waterway, it is gas that faces the most immediate threat. Spot gas prices at the European TTF hub surged over 40 per cent following Iranian attacks that forced Qatar to shut down production facilities.

This vulnerability stems from the unique nature of global gas trade. Only 10-15 per cent of gas is converted to liquefied natural gas (LNG) for seaborne transport, making the 86 million tonnes that flow through Hormuz annually equivalent to roughly a fifth of the global LNG market. Countries including China, Japan, and the European Union depend heavily on these shipments. The disparity in preparedness is striking: while the International Energy Agency maintains 613 days of oil import coverage in strategic reserves, gas storage remains a patchwork system with significant regional variations.

The crisis highlights the urgent need for energy security reforms. European storage currently sits below 30 per cent capacity, well under seasonal norms, and the EU's 90 per cent winter fill target may require substantial subsidies if prices remain elevated. The disruption should accelerate investments in LNG infrastructure and renewable energy development to reduce dependence on vulnerable supply routes.