European Gas Prices Spike Following Renewed Closure of Strait of Hormuz

European natural gas futures experienced a sharp rally in early Asian trading on Monday, driven by reports that Iran has once again closed the Strait of Hormuz. The strategic waterway serves as a primary conduit for energy exports from the Persian Gulf, and its closure poses a significant threat to global energy supply chains. The sudden reversal comes after a period of brief optimism on Friday, when Iranian officials had indicated that the waterway remained open to commercial traffic. This volatility underscores the fragile geopolitical state of the region and the high sensitivity of European energy markets to disruptions in the Middle East. Benchmark futures climbed as much as 11%, reaching €43 per megawatt-hour. This price action effectively erased the declines seen during the previous session, as traders rapidly repriced the risk of a prolonged energy chokehold. Market participants are now bracing for increased volatility across broader energy commodities. If the closure persists, the resulting supply constraints could put significant upward pressure on energy costs across the Eurozone, potentially complicating inflation management for regional policymakers.