European wholesale gas prices rose about 5% on Monday to their highest level since late 2022, while the cost of spot liquefied natural gas purchases by five Asian economies climbed to about $7.4 billion since the US-Iran war began on February 28, compared with about $3.1 billion for a similar volume under long-term contracts during the corresponding period in 2025.
European gas reaches highest level since 2022
The UK gas contract surpassed 200 pence (about $2.71) per therm before trading near 201.5 pence (about $2.73), while benchmark Dutch contracts for European gas rose to about €83.4 per megawatt-hour as the risks of prolonged energy-supply disruptions were repriced.
Prices rose as underground gas storage facilities in Europe were about 68% full, roughly 17 percentage points below historical seasonal averages, according to data from Gas Infrastructure Europe.
Yukio Kani, global chief executive and chairman of Japan's JERA, warned of declining European gas reserves and the possibility that shipping disruptions through the Strait of Hormuz could continue for an extended period.
LNG tanker traffic through the strait has declined, limiting Qatari supplies, while alternative export routes through the Red Sea face additional risks because of military developments in the region. The gas crisis has coincided with higher oil prices, adding to inflationary pressures on energy-importing economies and household and corporate bills.
$7.4 billion for Asian spot purchases
The disruption of about one-fifth of global LNG supplies because of the war has increased the cost of securing fuel for emerging Asian economies. India, Pakistan, Bangladesh, Thailand and Vietnam together spent about $7.4 billion buying LNG on the spot market since the war began on February 28.
Obtaining a similar volume of gas through long-term contracts would have cost about $3.1 billion during the corresponding period in 2025, meaning the cost of securing alternative supplies has risen by more than twofold.
The increase came after Qatari gas shipments through the Strait of Hormuz fell to extremely low levels, depriving Asian buyers of part of their contracted volumes and forcing them into the higher-priced spot market.
Reviewing energy plans and diversifying supplies
Fabian Kour, SEFE Marketing & Trading's executive vice president for Asia, said that if prices remain at elevated levels, LNG could become less competitive than alternative energy sources, raising questions about its long-term role as a transition fuel in Asia's energy mix.
Thailand aims to obtain at least 65% of its electricity from renewable sources by 2050, while Pakistan is expected to increase its reliance on solar and hydropower. Bangladesh is working to offer incentives for solar-panel installations, while Vietnam and the Philippines could turn to greater reliance on coal if gas prices remain high.
A survey by McKinsey showed that about 80% of LNG buyers expect to adjust their procurement strategies and give greater priority to geographic diversification in the coming years.
Rising gas prices had already begun slowing the expansion of fuel use in Asia before the current war, with 47 proposed gas-fired power projects, worth a total of about $52 billion, cancelled, withdrawn or making no progress over the past five years in countries including the Philippines, Thailand and Vietnam.
