A full blockade of the Strait of Hormuz and the halt of Qatari LNG exports have triggered sharp gas price spikes, exposing Europe’s depleted storage levels and raising the prospect that the EU may be pushed into a new energy crisis like the one it suffered in 2022.

WHAT:  Iran’s Revolutionary Guard has declared the Strait of Hormuz closed, Qatari LNG production has halted and European gas prices have surged amid fears that supply losses could exceed those seen during the 2022 Russian gas shock.

WHY:  Europe entered the crisis with thin storage buffers after a cold winter and regulatory easing, leaving it highly exposed to further supply disruption just as it prepares to ban remaining Russian LNG imports.

WHAT NEXT:  If the blockade persists, Europe may struggle to refill storage before next winter, face intensified competition with Asia for LNG cargoes and potentially delay or reverse elements of its Russian gas phase-out.

A complete blockade of the Strait of Hormuz and the suspension of Qatari LNG exports have jolted global energy markets, triggering sharp gas price spikes and exposing Europe’s already fragile supply position. The disruption threatens volumes exceeding the Russian gas shock of 2022, raising the prospect that the EU may be forced to delay — or even reverse — its planned phase-out of Russian LNG as it scrambles to secure supply in the event of a prolonged blockade.

The Islamic Revolutionary Guard Corps (IRGC) announced it was imposing a complete blockade on the Strait of Hormuz. “The Strait is closed,” said IRGC spokesman Ibrahim Jabari. “If anyone attempts to pass, the heroes of the IRGC and our navy will burn those vessels.”

The IRGC also threatened to cut off all alternative supply routes, referring to the UAE and Saudi Arabia, which have export ports outside the Persian Gulf. “We are attacking oil pipelines and will not allow a single drop of oil to escape from the region,” Jabari continued. “In the coming days, the price of oil will rise to $200.”

According to MarineTraffic, as of the morning of March 3, the Strait of Hormuz – through which 200–300 ships typically pass daily and around 20% of global oil and LNG traffic flows – was completely empty.

“Due to military attacks on QatarEnergy's operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of LNG and associated products,” QatarEnergy said in a statement on March 2.

Qatar is the world’s second-largest exporter of LNG, behind only the US. It shipped some 82.4mn metric tonnes in 2025, representing just under 20% of global exports, according to data from S&P Global Energy CERA. Analysts estimate the total volume of gas potentially affected by the current crisis – from Qatar, the UAE, and Israeli fields – at 120bn cubic metres (bcm) or more. The potential volume of lost supply exceeds the Russian gas shock of 2022, when Russia reduced supplies by approximately 80 bcm.

Prices surge but remain below crisis peaks

Prices reacted sharply. The front-month contract at the Dutch TTF hub in the Netherlands was already up 30% when trading resumed on March 2 at €38 per MWh, and rose again on March 3 to over €53 per MWh at the time of writing, up 10% in one day. Traders in Europe and Asia had not priced in a possible protracted delay to deliveries and prices are only now starting to react.

Goldman Sachs released a note on March 2 warning that the price of gas in Europe could more than double, jumping 130% year on year, if shipping of Qatari gas through the Strait of Hormuz does not resume within one month. During the worst of the 2022 crisis gas prices reached €300 per MWh, driving Russia’s current account surplus to $225bn, more than double the previous record set in 2021.

Despite the jump in prices, European gas remains well below crisis-era levels. Even after the latest surge, TTF is trading at less than a quarter of the nearly $2,000 per 1,000 cubic metres seen in August 2022. But banks and trading houses warn that a prolonged Hormuz disruption could quickly erase that comfort.

Europe entered the crisis exposed

The rally did not occur in a vacuum. It followed weeks of tightening fundamentals. Europe’s gas storage sites are currently around 30%, the lowest level for this point in the season since 2022, after an extended cold spell across central and eastern Europe drove withdrawals well above historical norms. In Germany, Europe’s largest gas market, storage levels had fallen to roughly 22%, according to Gas Infrastructure Europe (GIE) data.

The continent entered winter with a thinner buffer than last year. EU storage stood at 83% at the start of November, compared with 95% a year earlier, partly reflecting regulatory changes that lowered the mandatory fill target to 80%. While the easing helped reduce summer price spikes, it left less margin for error once winter demand accelerated.

Additional strain has come from Eastern Europe. Russian attacks on Ukrainian energy infrastructure have disrupted domestic gas production, forcing Kyiv to rely more heavily on imports. Poland agreed in January to increase gas transit capacity to Ukraine to 18.4mcm per day from 15.3mcm, starting in April, tightening regional balances further.

There may be other risks. Russian President Vladimir Putin claimed on February 24 that Ukraine was plotting attacks on the Blue Stream and TurkStream gas pipelines under the Black Sea to Turkey. TurkStream supplied 17.6 bcm per year to Europe last year, equivalent to around 5% of EU gas demand. While Putin’s claim is not possible to verify, there is precedent: Ukrainian personnel are alleged to have carried out the attack on the Nord Stream pipeline in 2023, according to investigations by The Wall Street Journal, Der Spiegel and others.

Russian LNG dilemma

Europe is already importing significant volumes of Russian LNG. The EU imported a record 142 bcm of LNG in 2025, a 28% increase from the previous year, as the bloc continued reducing dependence on Russian pipeline gas. Oil imports from Russia have fallen below 3% by 2025 due to sanctions, but Russian gas is still estimated to account for about 13% of EU gas imports, representing more than €15bn annually, according to Nepszava. France remains the largest Russian gas customer, followed by Hungary, which receives gas by pipeline. Russia remained the fourth-largest supplier of natural gas to the EU in 2025, exporting nearly 38 bcm, according to Bruegel.

If the suspension of Qatari gas continues, Europe may find it impossible to implement its planned ban on Russian gas imports. The legally agreed plan prohibits short-term contracts for LNG as soon as April 26 and any remaining LNG by the end of the year. Pipeline gas is then to be terminated by late 2027.

Summer refill challenge

Germany is already in crisis territory, with storage levels down to around 20% before Operation Epic Fury began, well below the seasonal averages of the last 15 years, making it difficult to bring storage back up to the EU’s mandatory 90% threshold by November 1.

In general, EU gas storage is set to end the current heating season at under 20%, one of the weakest outcomes in 15 years, according to IntelliNews Lambda calculations made before the US-Iran conflict began, with inventories likely to recover to only about 70–75% by the start of next winter under average refill conditions – well short of the 90% target. A prolonged blockade of the Strait of Hormuz and significantly higher gas prices could mean faster depletion of storage during the tail-end of winter and much more difficulty restocking during summer.

Europe will need to import unusually large volumes of LNG to rebuild inventories ahead of next winter, yet forward curves show limited incentive to inject gas early, increasing the risk of price volatility if supply tightens. Countries will be scrambling to refill tanks over the summer, a process that was already expected to push gas prices higher. Now they face a double blow from reduced Qatari exports, forcing Europe to compete directly with Asia for limited volumes. Prolonged disruptions via Hormuz would make this task all the more challenging.

And there are additional risks to consider. Norway, now Europe’s top gas supplier, could experience outages at some of its key fields. Meanwhile, potential French nuclear outages could place further strain on the gas system, as could weak wind and solar output, with Europe’s energy system more dependent on these intermittent sources of electricity than ever before.