European wholesale gas prices pushed above the €80 per megawatt hour threshold on Wednesday for the first time since early 2023, as a spate of incidents in the Strait of Hormuz drove risk premia higher in energy markets.
At 15:24 GMT, the Dutch front-month contract at the Title Transfer Facility (TTF) was quoted at €79.28 per megawatt hour, up €3.34 on the session according to ICE data. The contract traded as high as €80.98 earlier in the trading day.
Across the Channel, Britain’s front-month contract rose by 9.00 pence to 197.82 pence per therm. It reached 201.12 pence per therm at an earlier point in the session, marking its strongest level since December 2022.
Crude markets also reflected growing geopolitical concern. Brent futures moved above $100 per barrel on Wednesday, the first time that level had been breached since late July.
The price moves followed reports that Iran said it had attacked 10 ships near the Strait of Hormuz after the United States sank five Iranian oil tankers. Those incidents constitute what was described as the largest declared wave of tit-for-tat shipping incidents between the two sides since the conflict entered its sixth month.
Escalation between U.S. and Iranian forces has lifted worries about potential disruptions to oil and gas flows from the region, a factor that traders and market participants signalled was feeding into the higher energy prices.
Adding to the market backdrop, figures from Gas Infrastructure Europe show European gas storage stood at 67.12% of capacity, noticeably lower than the 79.48% recorded at the same point last year.
Market participants cited the combination of geopolitical risk and lower-than-last-year storage levels as contributors to the upward pressure on both gas and oil benchmarks during Wednesday’s session.
Summary
European TTF and British front-month gas contracts climbed to multi-month highs on Wednesday as attacks near the Strait of Hormuz raised supply concerns; Brent crude also rose above $100 per barrel. European gas storage is materially lower than a year earlier, reinforcing risk-driven price gains.