Europe Faces Risk of Another Gas Crisis as Prices Surge Amid Hormuz Disruption

Europe is facing another major natural gas supply shock, with benchmark prices now more than nine times U.S. levels and more than eight times prices in Asia, according to figures shared by Coin Bureau.

The latest disruption follows two major gas crises in the space of four years that have sharply increased European energy costs. Coin Bureau cited a Bloomberg warning that a third crisis could emerge by 2030 if the global market has fewer alternative suppliers available to replace disrupted volumes.

Russia Triggered Europe’s First Major Supply Shock

The first crisis began in 2022, when Russia sharply reduced gas deliveries to Europe. According to the figures cited by Coin Bureau, Russian supplies had previously met close to 40% of European Union demand.

The reduction forced European buyers to compete more aggressively for alternative sources of gas, including liquefied natural gas (LNG). The resulting supply squeeze contributed to a sharp divergence between European gas prices and those in other major markets.

Europe's dependence on LNG has since increased. Bloomberg analysis has noted that LNG now accounts for roughly 40% to 45% of the EU's total gas supply, compared with less than 25% before Russia's reduction of pipeline deliveries in 2022.

Hormuz Disruption Creates a Second Supply Shock

The second crisis is unfolding amid the conflict involving Iran and disruption around the Strait of Hormuz, a critical route for global energy shipments.

Coin Bureau said the waterway normally carries one-fifth of global LNG. Bloomberg has similarly reported that roughly a fifth of global liquefied natural gas and a quarter of seaborne oil transited the strait each day before the conflict.

The disruption has placed additional pressure on European gas markets as buyers compete for available LNG cargoes. Bloomberg's recent coverage has also pointed to Europe's challenge of rebuilding gas inventories ahead of winter while global supply remains exposed to geopolitical risks.

The resulting price gap illustrates Europe's exposure to disruptions in international gas trade. With European benchmark prices trading at more markets than nine times U.S. prices and Asian LNG at more than eight times, supply constraints are producing significant regional differences.

Bloomberg Warns of a Potential Third Crisis

The longer-term concern cited by Coin Bureau is that another major disruption could become more difficult to absorb if alternative suppliers are no longer available.

Bloomberg has examined the outlook for global gas supply through 2030, highlighting uncertainty around LNG balances, European demand and the timing of new supply projects.

The warning does not establish that a third crisis will occur. Rather, it points to the potential consequences if future disruptions coincide with limited spare supply and continued competition for LNG cargoes.

For Europe, the immediate challenge remains managing supply and storage through the current period of elevated geopolitical risk, while longer-term energy planning will depend on how quickly new LNG capacity and other sources of supply become available.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.