European Gas Prices Surge Amid U.S.-Iran Tensions Over Strait of Hormuz

European natural gas futures climbed 3% on Tuesday, with the May 2026 Dutch TTF Natural Gas Futures trading just above $58 (50 euros) per megawatt-hour (MWh) in Amsterdam. This increase comes as markets react to U.S. President Donald Trump's ultimatum to Iran to reopen the Strait of Hormuz by 8 p.m. Eastern Time today or face potential U.S. military action targeting Iranian infrastructure.

Since the onset of the Middle East conflict, which led to the closure of the Strait of Hormuz—a critical passage for approximately 20% of global liquefied natural gas (LNG) flows—European benchmark gas prices have surged by about 55%. On February 27, prior to the U.S. and Israel initiating military actions against Iran, front-month futures were trading at $37 (32 euros) per MWh.

The prolonged closure of the strait has significantly impacted global energy markets. Europe, with gas storage levels at historic lows following a harsh winter, faces challenges in replenishing reserves. The spike in spot LNG prices has intensified competition with Asia, which secures about 85% of the LNG that typically transits the Strait of Hormuz. In contrast, Europe's direct supply exposure is around 15%, yet the price surge threatens the upcoming refill season.

No LNG cargo has passed through the Strait of Hormuz in over a month. Recent attempts by two vessels carrying Qatari LNG to exit the strait were abandoned, marking the first such efforts since the conflict began.

The potential escalation of the conflict, including U.S. strikes on Iranian infrastructure and subsequent Iranian retaliation, could further disrupt global energy supplies. President Trump emphasized the gravity of the situation, stating, "Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the F--kin’ Strait, you crazy b-stards, or you’ll be living in Hell - JUST WATCH!"

The international community remains on high alert as the deadline approaches, with energy markets closely monitoring developments that could have far-reaching implications for global supply chains and economic stability.