European natural gas futures climbed to €40/MWh, marking a sixth straight gain and the highest level since early April, amid rising tensions between Israel and Iran. Traders are increasingly concerned about potential disruptions to vessel traffic through the Strait of Hormuz, a critical route for global energy trade. About 20% of the world’s LNG passes through the strait, and fears are growing that Iran could target tankers in the area.
Qatar, a major LNG exporter, has asked some vessels to wait outside the strait until they’re ready to load, adding to market nervousness. While southbound ships have passed without delays, several northbound tankers remain on standby. Oil prices have also risen in response to the heightened risk to trade routes. At the same time, Europe is facing hotter-than-usual weather, which is driving up demand for natural gas used in air conditioning. Forecasts suggest above-average temperatures will continue, adding further pressure to gas prices.
