Europe Brief: Gas Prices Up 63%, EU Braces for Higher Grocery Bills
European natural gas prices have surged 63% in a week. QatarEnergy force majeure removes 20% of global LNG. The double blockade of Hormuz and the Red Sea forces all Europe-Asia trade around Africa, adding weeks and millions per voyage.
Europe enters the week facing its sharpest energy price spike since the 2022 Russian gas crisis. But unlike 2022, this time the disruption hits oil, gas, and fertilizer simultaneously.
Commodity snapshot (as of March 23)
Brent crude at $106.41 per barrel. European natural gas prices have surged 63% in the past week — and have risen above Asian prices, an unusual reversal. Gold at $4,575 per ounce.
The LNG crisis: Qatar offline
Europe gets 12-14% of its LNG from Qatar, shipped through the Strait of Hormuz. QatarEnergy declared force majeure after attacks on its Ras Laffan facility, removing approximately 20% of global LNG from the market. European gas storage facilities need refilling during spring and summer for the 2026-27 heating season. If LNG supply remains constrained, Europe enters winter with lower reserves and higher prices.
The double blockade: Hormuz AND Red Sea
Europe faces a unique geographic disadvantage. Both primary shipping routes connecting Europe to Asia are disrupted simultaneously: the Strait of Hormuz is closed, and the Red Sea is threatened by resumed Houthi attacks.
All Europe-Asia trade must now route around the Cape of Good Hope — adding approximately 3,500 nautical miles and roughly $1 million in fuel costs per voyage. Transit times increase by 10-14 days. Maersk, Hapag-Lloyd, and MSC have all rerouted or suspended services.
Grocery bills rising
The EU is reportedly preparing consumer support measures as food price inflation accelerates. Urea prices have spiked 35% globally, hitting European farmers entering planting season. Glass production — critical for food packaging — is particularly exposed to higher gas prices. The UK's CIPS warns consumer goods prices could soar during 2026.
Energy-intensive industries squeezed
Glass, ceramics, steel, aluminium processing, and chemical manufacturing all consume large volumes of natural gas. Higher gas prices feed into the price of everything from beer bottles to pharmaceuticals.
What to watch
UK PM Starmer held calls with Trump and Canadian PM Carney about opening the strait. UK finance minister Reeves called the lack of a plan "frustrating." Any coordinated Western military escort action would significantly alter the European energy outlook.
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