Europe gas prices jump in March as Middle East tensions raise supply-risk premium

Gas prices across Europe surged in March as geopolitical tensions in the Middle East intensified and traders increasingly priced the risk of supply disruptions. The move mattered for European energy markets because it lifted the region’s benchmark gas costs well above the levels seen over the past two years, even though they remain far below the historic extremes of the early-2020s crisis.

March average rises 59% versus February

London’s ICE data show that the average price of front-month futures tied to the Dutch TTF benchmark reached $631.9 per 1,000 cubic meters. That was the first time since early 2023 that the monthly average exceeded the $600 threshold. The last comparable monthly level above that mark was January 2023, when the average stood at $711.6 per 1,000 cubic meters.

Escalation begins after strikes on Iran

The upward trend started on 2 March, immediately after reports of US and Israeli strikes on Iran. In the following days, gas prices rose by 38.2%, moving quickly toward $540 per 1,000 cubic meters. Throughout March, markets stayed under pressure as participants assessed risks tied to regional instability and potential disruptions along supply chains.

Infrastructure uncertainty keeps prices elevated

A central factor behind the volatility was uncertainty around critical infrastructure, including the Strait of Hormuz, alongside disruptions affecting gas facilities across the Middle East. With those risks lingering in pricing throughout the month, gas traded consistently above levels observed over the previous two years.

Biggest spike follows QatarEnergy LNG damage report

The most pronounced jump came on 19 March, when prices briefly reached $853.7 per 1,000 cubic meters. The spike followed a report from QatarEnergy indicating damage to two of its 14 LNG production units—an example of how sensitive global gas markets can be to disruptions even when they are geographically limited.

Still below 2021–2022 crisis highs

Despite March’s sharp increases, current price levels remain well below the extreme highs recorded during Europe’s energy crisis in 2021 and 2022. The all-time peak occurred in early 2022, when European gas prices surged to $3,892 per 1,000 cubic meters—the highest level ever seen in European gas markets.