Europe's Gas Market Absorbs 31% Price Surge as Hormuz Shock Fails to Fragment Supply
Updated
Updated · Reuters · Jun 17
Europe's Gas Market Absorbs 31% Price Surge as Hormuz Shock Fails to Fragment Supply
3 articles · Updated · Reuters · Jun 17
Summary
European gas prices jumped about 10 euros per MWh, or 31%, after the Hormuz closure halted nearly 20% of global LNG trade, yet the market kept functioning without major regional splits or infrastructure bottlenecks.
U.S. cargoes and higher supplies from Algeria and Nigeria helped fill the gap, while pipelines, LNG terminals and interconnectors kept price moves broadly aligned across EU member states.
The shock still raised costs sharply: the 27 EU countries' total gas bill is up 48% this year, and Russian LNG imports rose roughly 17% in January-May despite Europe's push to cut energy ties with Moscow.
Modeling by REKK and CSD suggests even a combined Hormuz-style disruption and full Russian gas ban would add only 0.4-1.4 euros per MWh, implying Europe's bigger long-term risk is weakening demand, not immediate supply shortages.
By 2040, EU gas demand is projected to fall to 2,700 TWh in a low-price case and 1,700 TWh in a high-price decarbonization case, while U.S. LNG could supply 80% of Europe's imports by 2030 if Russian gas is fully phased out.