London: European natural gas markets recorded sharp gains over the past 24 hours, with benchmark Dutch TTF contracts rising around 50% as escalating Middle East tensions, mounting transit risks through the Strait of Hormuz and reports of halted production at Qatar's Ras Laffan LNG facility intensified concerns over global supply.

According to Anadolu Agency, Tom Marzec-Manser, director of Europe Gas and LNG at Wood Mackenzie, stated that in 2025, Qatar exported 81 million tons of LNG, with the UAE supplying a further 5 million tons. Kuwait imported 8 million tons, so the global balance is effectively 78 million tons short because of the recent events. He mentioned that the price surge is likely to curb demand in parts of South Asia, while already weak LNG consumption in China should help the market rebalance. Marzec-Manser added that Wood Mackenzie expects 35 million tonnes of new LNG production in 2026, which will help cover the current supply-demand imbalance. However, he cautioned that the longer the Straits of Hormuz remains shut, the higher the gas prices will go.

Mehdy Touil, lead LNG specialist and shareholder at Calypso Commodities, highlighted that the Iranian blockade of the Hormuz Strait has locked in over 83 million tonnes of LNG supply, representing the most significant market shock since Russia halted exports to Europe in 2022. He noted that Europe is not the main pressure point this time, as its LNG portfolio relies heavily on FOB volumes from the US, limiting direct exposure to Qatari molecules. Touil pointed out that the vulnerability lies in East Asia, particularly China, and emphasized the challenge of rebalancing volumes across regions quickly. He remarked on the potential delay of the EU's planned ban on Russian LNG and explained that even if hostilities cease, clearing mines and restoring safe navigation will take time.

Giovanni Bettinelli, an energy consultant from GFB Insight, commented on the potential rapid tightening of the spot LNG market if tensions escalate further, particularly due to transit risks through the Strait of Hormuz. He noted that holders of long-term contracts with QatarEnergy and ADNOC would seek to replace disrupted volumes in the spot market, mainly from Asia, where China and India are currently the largest LNG importers. Bettinelli highlighted that Europe is likely to remain the premium destination for spot LNG cargoes due to its reliance on spot purchases to secure gas supply. He warned of sustained price volatility driven by perceived risks of further disruptions and changes to the conflict outlook.

Alex Froley, senior LNG analyst at ICIS, underlined the scale of potential disruption, noting that around 20% of the world's LNG is west of the Strait of Hormuz. He reported that LNG tankers have started avoiding Hormuz, with vessels from Qatar turning back and waiting off the coast of Oman. Froley emphasized that most Qatari cargoes are delivered to Asian buyers, and if these stop, Asia will compete to buy remaining cargoes, pushing up prices for Europe. He noted the significant rise in Europe's TTF gas prices and stressed the importance of the duration of the interruption on market impact and price increases.