European gas prices hit €79/MWh as Iran-US conflict threatens LNG routes

European wholesale gas prices reached new highs as geopolitical tension drove up costs for the continent. The front-month Dutch TTF contract traded above €79 per megawatt-hour on Wednesday morning, marking the highest level since early 2023. This surge follows intensified fighting between the United States and Iran, raising fears that the Strait of Hormuz remains closed to shipments carrying roughly 20% of global LNG trade. Since the start of the year, the continuous front-month TTF contract has ranged between €26.50 and €79/MWh as traders added a risk premium to European pricing. Rising near-term costs reduced the financial incentive for companies to refill storage tanks, even though markets anticipate better supply conditions later in the year. Storage levels across Europe remain unusually low. Oxford Economics stated EU gas consumption sits 15% to 20% below 2021 figures, enabling the bloc to function with depleted reserves while increasing dependence on LNG imports. Supply reductions from Qatar continue to strain the region's ability to maintain adequate stockpiles.