Price Surge in Europe's Fuel Market: How Long Will the Gas Crisis Last?

A historic drop in gas storage levels ahead of winter, combined with intensifying competition to secure new cargoes, has added pressure on the European economy.

Ambassador Arjan: The historical decrease in storage volumes on the eve of winter and the increasing competition for new shipments have intensified the pressure on the European economy.

The price of natural gas futures for November at the Dutch TTF Hub (Gas Trading Center) jumped to around $1,003 per 1,000 cubic meters.

Spot gas prices in the main trading centers of Europe are currently above $1,000 per 1,000 cubic meters.

The price of gas in Europe is increasing sharply at the same time as the unprecedented decrease in the reserves of this product before the arrival of winter and the continuation of conflicts in the Middle East.

Reuters also reported that European households and industries will face high gas prices for at least another year, and even if the (aggressive) war against Iran is resolved and the winter is mild, the continent needs to replenish its gas reserves because these reserves have already reached their lowest level.

Be sure to read further: Gas prices in Europe flared up

The basic gas prices in Europe have increased by more than 150% this year, one of the reasons for which is the shipping disruptions in the Strait of Hormuz (caused by the US war against Iran), which has disrupted almost 20% of the global liquefied natural gas exports from Qatar and the UAE, most of which are destined for Asia.

While some countries, including the U.S., Canada and Nigeria, have increased their gas exports, disruptions in Middle East gas exports have intensified competition for new shipments of the product and hampered Europe's efforts to refill reservoirs over the summer.