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Gas prices in Europe surge due to Iran-Israel conflict

Gas prices in Europe surge due to Iran-Israel conflict Gas prices in Europe have risen to their highest since the beginning of the year (Getty Images)
Author: Maria Kholina

European natural gas prices continued to surge after senior military officials in Israel confirmed that their country has no choice but to respond to attacks by Iranian missiles and drones, according to Bloomberg.

Futures at the TTF hub in the Netherlands rose by 3% to reach 32 euros per megawatt-hour (approximately 360 dollars per thousand cubic meters).

Contracts have increased by about 18% since last Thursday when markets began factoring in significant geopolitical risks, including potential disruptions due to Russian strikes on Ukrainian energy infrastructure.

Gas prices in Europe surge due to Iran-Israel conflict

Gas in Europe has hit a peak since the beginning of the year due to the conflict between Iran and Israel.

Officials in Europe and the United States have stepped up their calls on Israel to avoid escalating the conflict, which could trigger a wider war. A broader conflict in the region risks driving up global energy prices at a time when central banks are still trying to tame inflation.

While Europe has just ended an exceptionally mild winter with high gas reserves, traders are closely monitoring signs of supply disruptions. Currently, the region is not receiving a large amount of gas from the Middle East, but its dependence on global markets has increased since it lost much of its pipeline flows from Russia in 2022.

Meanwhile, supplies from the leading supplier Norway remain low due to unplanned maintenance at some of the country's facilities, which began last weekend.

Gas prices in Ukraine

Gas in Ukraine has been getting cheaper for the fifth consecutive month. The cost in March was 11,621 hryvnia per 1,000 cubic meters (approximately 290 dollars).

According to the NBU forecast, natural gas prices in the European market will decrease. Gas prices at the TTF hub in the Netherlands fell by 65.7% to 465.6 dollars per thousand cubic meters in 2023. The NBU predicts that in 2024 prices will fall by 0.9% to 461.6 dollars per thousand cubic meters, in 2025 they will fall by 10.8% to 411.8 dollars, and in 2026 they will fall by 12.2% to 361.5 dollars.