Global gas market pricing prolonged tightness due to Iran war, IGU executive says

Global gas markets are increasingly anticipating tight supplies well beyond winter due to the ongoing Iran war, according to Menelaos Ydreos, the secretary general of the International Gas Union (IGU). Ydreos, whose members represent over 90% of the global gas market, told Reuters that the market outlook is suggesting elevated prices and supply risks will persist through next summer before easing.

The current futures curves indicate that markets expect tight conditions to continue into next year, which is a significant shift from a few months ago when traders were expecting prices to ease after winter. Europe is now outbidding Asia due to the need to refill storage levels, as the conflict disrupts Gulf liquefied natural gas exports and complicates Europe's efforts to rebuild gas inventories.

The crisis differs from the 2022 energy shock following Russia's invasion of Ukraine because it is affecting multiple regions simultaneously. Additionally, European policymakers are grappling with how to balance climate goals with energy security and affordability, with the European Commission considering easing some implementation requirements while maintaining emissions-reduction targets.