European gas prices moved higher to the highest level since late 2022 as concerns grew around reduced shipping through the Strait of Hormuz. The increase coincided with Europe accelerating storage injections ahead of winter. Market pricing reflected tighter expectations for Middle Eastern energy supplies.
The Dutch TTF October contract traded at €78.77/MWh on Sept. 9, up 3.9% from the previous close. The level marked the highest since the second half of December 2022. Trading gains followed a further escalation involving Iran and the United States.
Hormuz vessel traffic declines to lowest level since May
Commercial vessel traffic through Hormuz slowed sharply over the previous 10 days, according to data cited in the report. The average was just 10 vessels per day crossing the strait. That rate was described as the lowest since May.
The move in gas prices was linked to heightened concern that disruption to one of the world’s most important energy shipping routes could tighten international LNG availability. With fewer vessels transiting, the market focus shifted toward potential impacts on cargo availability for global buyers.
Winter storage push raises demand for available LNG cargoes
The timing of the shipping slowdown is described as particularly sensitive for Europe because utilities are trying to rebuild inventories ahead of the winter heating season. That process creates additional demand for available cargoes during a period when storage levels are being targeted.
Any prolonged reduction in shipping through Hormuz would compete directly with Europe’s seasonal storage requirements. The report said this could keep LNG and European hub prices elevated even before heating demand begins to rise materially.
Gas price moves feed into power market cost pressures
For European power markets, the implications extend beyond gas itself. At current gas prices, gas-fired generation becomes substantially more expensive, according to the report.
The same pricing pressure increases the potential for sharp electricity price movements during periods when renewable supply is weak. The effect is tied to periods when generation from renewables is not sufficient to offset higher thermal costs.
