Iran attacks will increase gas prices, Gasunie warns; EU prices jump 25% at opening

The American and Israeli attacks on Iran and the Iranian retaliation will increase gas prices, the Dutch Gasunie predicted. The Strait of Hormuz, a crucial transit route for the supply and transit of oil and gas, is closed to shipping traffic due to the attacks. European gas prices rose by 25 percent on Monday.

About a fifth of the world’s liquefied natural gas (LNG), primarily from Qatar, is shipped through the Strait of Hormuz. “Broadly speaking, it can be said that this closure will lead to nervousness in the gas market and is likely to higher gas prices,” a Gasunie spokesperson said.

On the leading Amsterdam gas exchange, the gas price rose by 20 percent shortly after trading began, reaching €38.44 per megawatt-hour. At the opening, the price shot up by a quarter. This was the sharpest increase since August 2023. The price peaked at over €50 in February of last year. But thanks primarily to large quantities of LNG imported by Europe, the price has since fallen.

According to the Gasunie spokesperson, this new price jump comes at a “highly unfortunate time.” Dutch gas storage shrank significantly this winter and is now less than 11 percent full. Gasunie does not anticipate any supply problems in the short term. However, this is the time when the gas storage facilities should be refilled.

Florence Schmit, an energy expert at Rabobank, also pointed out that Qatar is crucial for the supply of LNG to Asia and Europe. If the country “cannot export cargo due to infrastructure damage or shipping restrictions, the effect on global gas prices would be dramatic.”

Experts at the American bank Goldman Sachs warned that European gas prices could more than double if shipping through the Strait of Hormuz is halted for a month.

Dutch consumers will not immediately notice the higher gas prices on their energy bills. This will only happen when energy suppliers adjust their rates.

According to Gasunie, the Netherlands is only marginally dependent on gas from Qatar. Last year, over half of the gas imported through the Netherlands came via pipelines, primarily from Nowray and from small Dutch fields. The remaining portion, approximately 45 percent, was imported as LNG. Only a small portion of this came through Qatar.

Oil prices also surged on Monday with their biggest daily increase in four years. Brent crude, the benchmark for Middle Eastern and North Sea oil, rose 13 percent in early Asian trading to over $82 a barrel. On Friday, the price closed at $72.87.

How long these price increases will last is uncertain. Some analysts warn of further increases, while others expect the conflict to subside within a week or two if the U.S. decides to de-escalate.