How the Israel-Hamas war could push up gas prices
Gas prices rose to their highest level since February on Friday, October 13, after Israel ordered its Tamar gas field to close down and separately workers at major plants in Australia threatened to strike.
Volatility in the markets was also sparked last week after a Baltic Sea pipeline between Finland and Estonia developed a leak, with suggestions of sabotage.
The Tamar site, offshore in the Mediterranean, produces about half of Israel's 20 billion cubic metres of gas it uses every year.
But it is within range of rocket fire from the conflict between Israel and Hamas, which first broke out on October 7.
Israel's energy ministry said on Monday, October 9: "Due to the situation, Israel's security establishment ordered to temporarily stop the supply of natural gas from the Tamar field and the economy's energy needs will be met with other fuels."
Some gas from the field is exported to Egypt where it's turned into liquefied natural gas to be sold into the European Union.
The EU has already spent the last 18 months trying to find alternative sources of gas to avoid buying Russian energy since its invasion of Ukraine, increasing demand in other markets.
This new block to production has spooked markets, with the Dutch gas futures - which indicates the future price of gas when it comes to market - surging nearly 30% last week, according to Business Insider.
International Energy Agency gas analyst Gergely Molnar told S&P Global: "When we are looking at the upstream sector in Egypt, we have already seen that it is struggling to keep up pace with rapidly rising domestic consumption as well as LNG exports.
"If we take out Israeli pipe gas imports from that equation, it will harm the ability of Egypt to export LNG over the coming months."
Markets are also pessimistic as workers at two of energy giant Chevron's plants in Australia are threatening to strike. The facilities supply about 7% of the world's liquefied natural gas, according to the Telegraph.
The news comes as the UK weather took a drastic turn from unseasonably warm temperatures which is expected to see a spike in UK gas demand.
Speaking before the Israel-Hamas conflict broke out, National Gas said the UK's gas supply was "in a better position" than last year but was exploring "long-term options" to balance supply and demand.
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