European gas prices top EUR100/MWh for first time since 2022 energy crisis

European natural gas futures rose above EUR100 per megawatt-hour for the first time since the 2022 energy crisis, Bloomberg reported. The surge has revived fears of another painful price shock just as the region enters its peak demand season, Bloomberg noted.

Dutch gas futures for next-month delivery, the European benchmark, rose as much as 5% to EUR100.75 per megawatt-hour, the highest since December 2022, Bloomberg reported. Equivalent contracts in the UK also jumped to their highest level since then. European gas prices crossed the EUR100 threshold for the first time since the market turmoil that followed Russia’s invasion of Ukraine, Bloomberg noted.

European gas prices have more than tripled since late February, when the war in the Middle East began. Fears that an escalation of the war with Iran could further disrupt global gas supplies, combined with unusually low European gas inventories and rising heating demand, have driven the latest surge, Bloomberg reported. Europe is still far from the extreme prices seen in the last energy crisis. In 2022, Dutch natural gas futures reached an intraday record of around EUR345 per megawatt-hour, while Brent climbed to almost $140 per barrel.

Oil prices also rose on Wednesday: WTI futures jumped 2.8% to $102.70 per barrel, while benchmark Brent contracts gained 1.6% to trade at around $116 per barrel. Among the drivers were reports that the White House had told several Persian Gulf countries to prepare for a short, intense military campaign against Iran after the midterm elections in the U.S. The Wall Street Journal reported this on Wednesday, citing people briefed on the conversations.

“EUR100 is no doubt a psychological mark,” said Tom Marzec-Manser, director of Europe gas and LNG at Wood Mackenzie. “With the geopolitical situation in the Middle East changing so much at the moment, particularly given the upcoming U.S. midterms, it will not take much to move European gas prices even higher.”

Supply disruptions linked to the Middle East conflict have already added more than EUR100 billion to Europe’s fossil-fuel import bill. With inventories unusually low for this time of year and colder weather expected to increase demand in the coming days, the return to triple-digit prices is intensifying pressure on businesses, households, and governments, Bloomberg noted.

“We have two wars and their impact have merged,” said Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy. “All commodity prices are up, so they are pushing each other.”