FT: US-Israel operation against Iran could push gas prices up 25%

A military operation by the United States and Israel against Iran could drive gas prices up by 25%, the Financial Times reports, citing Tom Marzec-Manser, an analyst at consultancy Wood Mackenzie.

Any disruption to international shipping through the Strait of Hormuz would affect supplies of liquefied natural gas (LNG) from Middle Eastern countries, according to him.

Qatar and the United Arab Emirates use this route to transport around 20% of global LNG volumes to Asia and Europe. Marzec-Manser said European gas prices could rise by at least 25% when trading opens on March 2.

The Strait of Hormuz is a critical chokepoint for global energy: about 20 million barrels of oil per day (roughly 20 % of worldwide oil flows) and around 20 % of seaborne liquefied natural gas (LNG) shipments pass through this narrow waterway between Iran and Oman, primarily bound for Asia and Europe.

Analysts warn that disruptions to Hormuz, even short-term, would tighten supplies sharply, forcing Asian and European importers to seek alternatives, which could put sustained upward pressure on both oil and LNG prices and increase shipping and insurance costs.

By Jeyhun Aghazada