Renewed tensions between the US and Iran have dampened market expectations for a swift recovery in energy transit through the Strait of Hormuz, extending the upward momentum in European natural gas prices to a third consecutive day. Benchmark futures spiked by as much as 4.3% on Wednesday before paring some of those gains, with values still hovering near intraday highs not seen since January 2023.

The front-month October contract has climbed roughly 10% this week. The latest escalation follows a second round of US strikes against Iranian targets, while President Trump downplayed the prospect of reaching a deal to end a conflict that has now dragged on for more than six months. The ongoing war has disrupted approximately one-fifth of global energy supply, with shipping through the strategic waterway nearly grinding to a halt.

"We do not anticipate a repeat of the 2022-style energy crisis, but Europe remains structurally vulnerable to gas supply shocks," said Tancred Fulop, senior analyst at Morningstar. He noted that the supply-demand balance across Europe is expected to stay tight through next year, with a meaningful return to price normality unlikely before 2028, when new global LNG production capacity comes onstream.

The persistent supply disruptions are adding strain to Europe's winter refilling efforts. Storage facilities across the continent are currently only 65% full—the lowest level for this point in the season since records began in 2009. European buyers must maintain elevated prices to compete for limited cargoes on the global market, especially as South Asian purchasers are also ramping up their procurement activity.

In a note, BMI, a Fitch Solutions unit, highlighted that "pre-winter refilling demand will boost European import needs, potentially diverting more LNG cargoes from east to west toward Europe." The firm added that this dynamic is also expected to keep upward pressure on benchmark gas prices across Asia.