Damage to liquefied natural gas (LNG) infrastructure in Qatar and rising tensions in the Strait of Hormuz could lead to a sharp increase in gas prices in the European market, APA-Economics reports, citing a report by the international rating agency Moody’s.
According to the agency’s report, an incident that occurred on March 19 at QatarEnergy’s Ras Laffan LNG facility damaged approximately 17% of the country’s gas supply, and restoration work may take 3–5 years.
It is noted that particularly in the event of a prolonged disruption in the Strait of Hormuz, this would reduce gas supplies to the European Union and intensify competition for LNG during the summer season. As a result, gas prices could exceed current futures levels and rise above €100 per megawatt-hour (MWh).
According to the report, in 2025 the EU imported approximately 10 billion cubic meters of LNG from Qatar, accounting for 2% of its total gas imports. Nevertheless, a reduction in global LNG supply could have a broader impact on prices in the European market.
The agency notes that gas storage levels in the EU are currently below the long-term average, and weak replenishment during the summer months creates additional risks ahead of the winter season.
According to Moody’s, Italy and Belgium may be more affected by potential supply shortages due to their higher dependence on Qatari gas. Although Germany and France do not have direct imports, rising prices will also indirectly affect these countries.
At the same time, the report emphasizes that lower gas demand in Europe compared to pre-pandemic levels and the growing share of renewable energy sources may somewhat ease the pressure.
However, rising gas prices will most negatively impact energy-intensive industries such as chemicals, metals, and mining. In contrast, LNG traders and major oil and gas companies may benefit from price volatility.
It should be noted that Moody’s assesses this situation as a risk of a price shock amid declining global LNG supply, increasing competition with Asia, and low gas reserves in Europe.
