European natural gas prices are on track for a fourth consecutive weekly advance, driven by intensifying supply disruption fears from the latest Middle East military conflict and the urgent need to replenish inventories ahead of the winter heating season. Despite intraday fluctuations in benchmark futures on Friday, weekly gains remain firmly above 7%.

Following a brief period of relative calm, the United States and Iran have once again escalated their retaliatory military strikes, sending both European and Asian gas prices to their highest levels in over three years. With shipping through the Strait of Hormuz now impeded, Qatari LNG exports have nearly ground to a halt.

Before the conflict, roughly one-fifth of the world's crude oil and liquefied natural gas (LNG) transited the strategic Strait of Hormuz to reach global markets. While some crude tankers continue to navigate this critical waterway, Qatar's LNG shipments through the strait have essentially come to a standstill. The UAE appears to still be loading LNG carriers in the Persian Gulf, but overall volumes remain far below pre-conflict levels. Market participants widely fear that any further escalation could trigger a broader disruption of energy exports across the entire Gulf region.

With the heating season fast approaching, Europe is under immense pressure to rebuild gas inventories. Current storage facilities across the continent are only about 66% full, marking the lowest level for this time of year since records began. Germany's situation is particularly acute, with storage levels at just 54%, well below the seasonal average. Such unusually low inventory levels mean Europe could face a tight supply landscape even under normal winter temperatures. Should a cold snap materialize or Middle East tensions persist, prices could surge even higher.

Strategists at ING Groep NV noted in their weekly research that "the escalation in the Persian Gulf further delays hopes for a recovery in LNG exports from the region." They anticipate intensifying competition for LNG cargoes between Europe and Asia as winter approaches, "particularly if Qatari LNG remains largely absent from the market through year-end."

As of the time of writing, the European benchmark—Dutch TTF front-month futures—is trading at €70.78 per megawatt-hour, roughly flat on the day but with weekly gains solidly above 7%. Analysts believe current prices already factor in a substantial Middle East geopolitical risk premium, yet further upside remains possible should the conflict escalate or Iran follow through on threats to blockade the strait.

Meanwhile, Asian spot LNG prices are tracking European gains closely, with the Japan-Korea Marker (JKM) benchmark breaking above $14 per million British thermal units—the highest level since 2023. The competition between these two major consuming markets for limited LNG supplies will continue to underpin global gas prices throughout the winter months.