Tensions in the Middle East have once again spilled into global energy markets. Following Israel’s recent airstrikes on Iranian territory—some reportedly targeting gas and energy infrastructure—liquefied natural gas (LNG) prices around the world have jumped, reflecting growing concerns about supply security and transport disruptions.
Within days of the strikes, spot prices for LNG in key markets rose noticeably:
– In Asia, spot prices climbed by nearly a dollar to around $13.40 per million British thermal units (MMBtu).
– Southern Europe also saw increases, with prices nearing $12.40/MMBtu.
These shifts weren’t caused by actual shortages but by market nerves. Traders are building in risk premiums in case the situation escalates or critical supply routes are disrupted.
The biggest worry centers on the Strait of Hormuz, a narrow waterway that handles about a fifth of the world’s LNG traffic. Iranian officials have floated the idea of blocking the strait in retaliation, raising alarms about what could happen if tankers are unable to pass freely.
So far, the strait remains open. But even the possibility of closure has traders hedging, especially since many LNG shipments from Qatar and the UAE pass through it.
Meanwhile, regional gas flows have already taken a hit. Israeli gas platforms in the Mediterranean temporarily halted operations after the airstrikes, affecting exports to Egypt and Jordan. Those countries may need to compensate by increasing LNG imports, tightening availability for others.
There are also growing worries about Iranian gas fields and pipelines, especially if further strikes occur or infrastructure is damaged in retaliatory moves.
Despite the jump in prices, most analysts agree this is more about geopolitical risk than actual supply shortages. If tensions cool off, prices may settle back down. But if the conflict intensifies or if shipping through Hormuz is restricted, a sharper spike could follow.
