Review · Manila WireHome Energy Energy-General Tsvetana Paraskova What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,... More Info Set us as your preferred Google source Premium Content By Tsvetana Paraskova - Sep 29, 2026, 6:00 PM CDT European gas prices have surged as disruption at the Strait of Hormuz has removed much of Qatar’s LNG supply from the global market. EU gas storage was just over 71% full on September 28, with Germany below 58%, leaving Europe unusually exposed ahead of winter.
Gas Infrastructure Europe Europe has diversified its gas supplies since 2022, but replacing lost Qatari LNG is proving expensive and is adding to inflationary pressure. European natural gas prices have soared dramatically since the war in Iran trapped a fifth of the world’s liquefied natural gas supply behind the Strait of Hormuz. The high prices are creating a headache for governments amid soaring energy bills for households and spiking energy costs for industry.
The surge in natural gas, gasoline, and diesel prices in recent months is clearly fueling inflation. The European Central Bank (ECB) has raised key interest rates twice since June, with potential for further increases (although the ECB’s Governing Council said earlier this month that it “is not pre-committing to a particular rate path” amid a highly uncertain outlook). Middle East’s LNG Crunch All these uncertainties are the result of the lack of Qatari LNG cargoes on the market because they cannot move through the Strait of Hormuz as easily as oil shipments.
Since early March, European gas prices have reflected the tight global gas market, with most of Qatar’s LNG supply still offline and no clarity on when some semblance of normal shipping of LNG cargoes would return at the Strait of Hormuz. Some Qatari and UAE cargoes have managed to transit the Strait of Hormuz in recent weeks, but volumes are too low to move the needle of the global LNG balance. Even as crude oil cargoes have been pushing through the Strait with millions of barrels per day every day, LNG cargoes have struggled to transit the chokepoint as the gas is trickier to reload in ship-to-ship (STS) transfers than oil.
The choked LNG flows from the Middle East in the past six months sent September gas prices in Asia and Europe to the highest since the 2022-2023 energy crisis, as buyers are competing for available supply that doesn’t need to move through the Strait of Hormuz. As a result of choked supply, rallying prices, and a futures curve in backwardation that discourages storing gas, European gas storage levels are at a historical low. As of September 28, gas storage sites in the EU were 71% full per data by Gas Infrastructure Europe, compared to 86% for this time of year in the past five years.
Some major economies, including the biggest, Germany, have even lower-than-average gas stored so far this filling season. Germany storage sites, for example, are only about 57% full, which has prompted concerns about supply security if the coming winter turns out much colder than previous winters. Europe’s Gas Supply Security This week, QatarEnergy extended the force majeure on LNG deliveries through November.
For Italian buyer Edison, the force majeure period runs through early December. As many as 35 cargoes under its long-term deal with Qatar haven’t reached Italy so far this year, Edison said on Monday. The Italian energy and gas supplier reaffirmed “its ability to source alternative gas for all its customers and to fully honor its past and future commercial commitments." VGN, one of Germany’s biggest gas importers, also assured this week that Germany doesn't face a gas supply shortage despite record-low levels of natural gas in storage sites.
“Compared to 2022, the system is much more robust overall. We have more access to liquefied natural gas (LNG) and we have broadened our overall position in terms of sources of supply,” VNG's chief executive officer Ulf Heitmueller told Reuters in an interview published on Monday. Diversification helps Europe source supply, but the Hormuz crisis has made that supply much more expensive than before the Iran war.
As a result, Europe is paying a hefty price for securing prompt LNG supply. One silver lining is that the price premium to ship U.S. cargoes to East Asia has crumbled in recent weeks, effectively shutting the U.S. Gulf Coast-Asia arbitrage and shifting cargoes toward Europe.
Asia was winning the competition early in the spring and summer, but with the closed Atlantic-Pacific arbitrage through the rest of the year, Europe is now importing more prompt LNG supply, but at a high cost. Policymakers and authorities say that Europe doesn’t face immediate gas shortages, but warn that until the Hormuz crisis lasts, prices are set to remain much higher than in the past two years. “Despite lower storage levels compared to historical levels, the Commission and EU countries reconfirmed that EU gas supply remains stable,” the European Commission said last week following a meeting of the Gas Coordination Group, which advises the Commission on coordinating security-of-supply measures in the event of an EU or regional emergency.
But ECB economists have warned that the surge in wholesale natural gas prices is set to pass through to retail and electricity inflation in the Eurozone faster than in the past. The European Energy Commissioner, Dan Jørgensen, has urged EU governments to consider measures to curb energy and gas demand as the gas supply situation hasn’t improved since the start of the war in Iran. “I invite you to consider taking or continuing to take measures that can sustain injections or reduce gas and electricity demand for as long as necessary,” Jørgensen wrote in a recent letter to EU governments seen by Euronews .
Even if Europe manages to squeak through the winter without major gas supply scares, the gas price surge will hit energy bills and industry energy costs again. By Tsvetana Paraskova for Oilprice.com More Top Reads From Oilprice.com Saudi Arabia Restarts Red Sea Crude Oil Loadings India Looks to Boost Exploration as Hormuz Crisis Threatens Supply UAE's Next $25 Billion Bet On India Includes Energy Sector Download The Free Oilprice App Today Back to homepage Tsvetana Paraskova What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,... More Info Leave a comment EXXON Mobil -0.35 Open 57.81 Trading Vol. 6.96M Previous Vol. 241.7B BUY 57.15 Sell 57.00
