According to the ICE Futures exchange as of the morning of June 16, at the largest gas hub TTF in the Netherlands, the cost of futures with delivery in July rose to €38.73 per MWh, or $470.92 per 1 thousand cubic meters at the current exchange rate. This is the maximum price since April this year.
The Bloomberg agency believes that investors are afraid that the conflict in the Middle East will escalate and turn into a long-term confrontation, so they started to actively stock up on gas, which pushes prices up.
In addition, gas traders express fears that further escalation of the conflict could interrupt supplies through the Strait of Hormuz, an important waterway for marine supplies. While the physical supply of LNG does not appear to be affected at the moment, any disruptions could strain the market at a crucial time in Europe’s stockpiling season.
Another factor negatively impacting the market is Israel’s strike on Iran’s South Pars gas field in the Persian Gulf. According to international sources, the attack caused a powerful explosion and fire at the natural gas processing plant. The fire also halted production at one of the offshore platforms with a daily output of 12 million cubic meters.
Energy market analysts expect that under the worst-case scenario of the situation in the Middle East (prolongation and expansion of the conflict, blocking the Strait of Hormuz, etc.), the price of oil on world markets may reach $250-300 per barrel, and gas futures may double in price against today’s quotations.
