The prolonged LNG disruption in the Strait of Hormuz is exposing Europe’s renewed energy vulnerability.
BRUSSELS, BELGIUM
European natural gas prices have climbed to their highest level since early 2023 as the continuing disruption of liquefied natural gas shipments through the Strait of Hormuz tightens global supplies. Dutch front-month TTF futures, the continent’s principal benchmark, approached €79 per megawatt-hour after rising more than 40% within a month.
The increase reflects mounting concern that Middle Eastern LNG deliveries will remain constrained even if maritime traffic begins to recover. Qatar, one of the world’s largest LNG exporters, normally sends most of its shipments through Hormuz. Damage to production facilities and continuing security risks have reduced its export capacity, while the blockade has sharply limited deliveries from the wider region. Unlike oil, LNG cannot easily be redirected through alternative pipelines or shipping routes.
Europe enters this disruption with storage facilities approximately two-thirds full, significantly below their usual seasonal level. Germany and the Netherlands, two of the continent’s most important gas markets, hold even smaller reserves. Additional supplies from the United States and other producers have prevented an immediate physical shortage, but they have not been sufficient to restore price stability or eliminate competition with Asian buyers.
Higher wholesale prices could eventually reach households through electricity and heating bills while increasing costs for chemicals, fertilizers, glass, steel and other energy-intensive industries. The impact may also complicate the European Central Bank’s efforts to control inflation. Governments have less fiscal room than during the 2022 energy crisis, making another extensive programme of subsidies or price controls increasingly difficult to finance.
Russia is using the market shock to argue that Europe should reconsider its rejection of cheaper Russian pipeline gas. Reopening that relationship could reduce costs in the short term, but it would recreate the strategic dependence that the EU has spent years dismantling. Europe therefore faces an uncomfortable choice between paying more for diversified energy and accepting the political risks attached to cheaper but geopolitically vulnerable supplies.
The crisis demonstrates that replacing one supplier does not necessarily produce energy independence. Europe reduced its exposure to Russia by increasing LNG imports, yet that strategy transferred part of its vulnerability from pipelines in the east to maritime chokepoints in the Middle East. Storage, renewable generation, interconnections and long-term supply diversification remain essential if the continent wants energy security to become more than the ability to outbid other buyers during a crisis.
Economic dependence creates efficiency, but it can also create leverage.