Dutch and British gas prices were slightly lower on Wednesday morning, after soaring earlier this week, but could remain volatile as the market tries to gauge how long Qatari supply of liquefied natural gas (LNG) will remain disrupted.
The benchmark Dutch front-month contract at the TTF hub was down €1.02 at €53.27 per megawatt hour (MWh) by 10:18 GMT, data from the Intercontinental Exchange (ICE) showed.
It hit an intraday day high of €65.79/MWh, its highest level since January 2023 on Tuesday but fell by €10 again by the end of the day.
The British April contract was down 3.92p at 137.07p per therm, ICE data showed.
The gas market has been jolted by the US-Israeli war on Iran and retaliatory attacks across the Middle East, halting Qatari LNG production and shipping through the Strait of Hormuz.
The US Navy could begin escorting tankers through the Strait of Hormuz if necessary, President Donald Trump said on Tuesday, but analysts questioned whether this really could revive energy transports that have ground to a halt.
"As long as Iran is able to launch missiles and drones over the water, we doubt that this will materially improve the situation," said Arne Lohmann Rasmussen, chief analyst at Global Risk Management (GRM).
Outbound LNG volumes through the Strait of Hormuz are expected to account for around 17 per cent of global supply in 2026, or roughly 337 million cubic metres (mcm) per day, said Ross Wyeno, head of LNG short-term analysis at SP Global Energy.
"Of those volumes, we estimate that around 170 mcm/day will be delivered to buyers that will need to immediately source replacement cargoes from the global spot markets or existing long-term contracts," he added.
This is around 30 per cent of expected European imports in 2026, Wyeno added for comparison.
The European Union has told its member countries it does not see any immediate effect from the conflict in Iran on the security of natural gas supply, and is not currently planning response measures at national or EU level.
Meanwhile, the Russian-flagged liquefied natural gas (LNG) tanker Arctic Metagaz, sanctioned by the US and Britain, caught on fire in the Mediterranean, with Russia on Wednesday blaming the incident on a Ukrainian attack.
EU gas storage sites were last 29.9 per cent full, with depletion having slowed as milder weather limited demand, Gas Infrastructure Europe data showed.
(Reporting by Nora Buli; editing by Nina Chestney)