European energy markets have reacted sharply to the escalation of hostilities in the Middle East. Following reports of a near-complete halt in tanker movement through the Strait of Hormuz, gas futures jumped by as much as 25%—the steepest increase since August 2023, Bloomberg reported as of March 2. According to analysts, investors fear large-scale disruptions to global energy supplies.
The Strait of Hormuz, which connects the Persian Gulf and the Gulf of Oman, is a strategic artery for global energy, accounting for approximately one-fifth of global liquefied natural gas (LNG) exports. Following Russia's full-scale invasion of Ukraine, this route has gained even greater significance for international energy trade.
While the bulk of Middle Eastern LNG is traditionally purchased by Asian nations, any disruption simultaneously intensifies competition for alternative supplies. This, in turn, pushes prices higher worldwide, including in Europe. The situation is particularly sensitive for Europe; as the heating season concludes, consumption has dropped, but storage levels remain low. Consequently, as the publication notes, EU countries will need to actively import LNG throughout the summer to prepare for the next winter.
A key factor determining the market outlook is the potential duration of the strait's blockage. Tom Marzec-Manser, Head of Gas Analytics at Wood Mackenzie Ltd, noted that the longer shipping restrictions persist, the higher prices will climb. Meanwhile, Bloomberg points out that U.S. President Donald Trump has indicated that bombardments of Iran could continue for another four to five weeks.
Goldman Sachs analysts estimate that if the strait remains closed for a month, European gas prices could more than double. This would be a significant blow following a recent 19% decline in futures. Simone Tagliapietra, an analyst at the Bruegel think tank, warned that this would complicate the refilling of storage facilities and increase costs for industry.
Tensions escalated following U.S. and Israeli strikes on Iran, to which Tehran responded with attacks across several countries in the region. LNG exporters from Qatar and the UAE are rerouting or delaying shipments. Israel has temporarily suspended some of its gas production capacity, forcing Egypt to seek additional supply sources.
Although Iran maintains it has no plans to close the strait, vessels have already begun bypassing it, and Qatar has temporarily suspended some maritime shipments. According to Arne Lohmann Rasmussen, chief analyst at Global Risk Management, Europe’s gas market is more vulnerable to a blockade of the Strait of Hormuz than the oil market. Against this backdrop, Dutch gas futures jumped 21% to 38.72 euros per MWh.
The Strait of Hormuz between Oman and Iran is a critical hub for global energy supplies. As Forbes reports, in 2025, approximately 13 million barrels of oil pass through it daily, representing roughly 31% of all maritime oil trade. This route provides Saudi Arabia, Iraq, Iran, and the United Arab Emirates with access to the Gulf of Oman and the Arabian Sea. Any navigation disruptions impact global energy prices, inflation, and fuel costs.
Iran has frequently threatened to close the strait as a point of leverage over the years. The situation intensified on February 28, when the U.S. and Israel announced a large-scale military operation against Iran. As a result, approximately 150 tankers anchored in the Persian Gulf near the Strait of Hormuz, with dozens more waiting on the opposite side. Massive U.S. and Israeli strikes on targets in Iran have effectively destabilized the region and triggered a collapse in shipping.