Global gas markets are increasingly pricing in tight supplies well beyond winter as the Iran war disrupts Gulf liquefied natural gas exports and complicates Europe’s efforts to rebuild gas inventories, Reuters reports quoting Menelaos Ydreos, secretary general of the International Gas Union (IGU), whose members represent more than 90 per cent of the global gas market.
Forward gas prices suggest traders expect elevated prices and supply risks to persist through next summer before easing, according to Ydreos.
“The market right now is saying that they see the conflict getting prolonged,” Ydreos tells Reuters.
He adds that current futures curves indicate markets expect tight conditions to continue into next year, a marked shift from a few months ago when traders expected prices to ease after winter.
“Europe is starting to outbid Asia because they need to refill storage levels,” Ydreos notes, adding that the current crisis differs from the energy shock that followed Russia’s invasion of Ukraine in 2022 because it is affecting multiple regions at the same time.
