Ankara: European natural gas prices rose to their highest level since January 2023 on Monday as renewed tension in the Middle East raised concerns over further disruptions to liquefied natural gas (LNG) exports from the Persian Gulf. The front-month Dutch TTF gas contract was trading at £69.90 per megawatt-hour (MWh) at 11.34 a.m. local time (0834 GMT), up 4.4% from Friday's close of £66.97.

According to Anadolu Agency, EU gas storage facilities were 64.7% full, based on data from Gas Infrastructure Europe (GIE), leaving inventories below historical levels for this time of year and raising concerns over efforts to refill storage ahead of the winter heating season. While milder weather forecasts for early September are expected to curb near-term demand, low storage levels and uncertainty over LNG supplies from the Gulf are putting upward pressure on prices.

Geopolitical tensions also added to supply concerns after the US military struck two targets on Lark Island overnight, while Iranian media reported missile launches against targets in the region following the strikes. Disruptions linked to the conflict have raised concerns over LNG exports from major Gulf producers, particularly Qatar, tightening the global LNG market.

A prolonged disruption to Gulf LNG exports could force European buyers to compete more aggressively with Asian buyers for available cargoes, potentially putting further upward pressure on European gas prices. Analysts say the combination of geopolitical risks, low European storage levels, and tighter global LNG supply could keep the market volatile in the period ahead.