Goldman Sachs Warns Hormuz LNG Halt Could Spike European Gas Prices 130%

Goldman Sachs analysts warned that a one-month disruption of liquefied natural gas shipments through the Strait of Hormuz could push Europe and Asia spot LNG roughly 130% higher to about $25 per million British thermal units, a scenario reported by Bloomberg, Firstpost, En Oninvest and The Independent. The bank said the risk is acute because about 20% of global LNG flows transit the narrow waterway, with much of that cargoes originating in Qatar.

Tanker traffic through the main shipping lanes in the Strait of Hormuz was reported halted on March 1, with FinanceMagnates saying more than 100 tankers were held up and two ships attacked. The Independent reported hundreds of vessels anchoring as traders braced for disruption and quoted an EU naval force Aspides official saying vessels had received transmissions from Iran’s Revolutionary Guards stating that “no ship is allowed to pass the Strait of Hormuz.”

The oil market already moved sharply as the situation unfolded. En Oninvest reported Brent jumped more than 13% and WTI nearly 10% on the threat to shipping, while The Independent quoted Jorge Leon, head of geopolitical analysis at Rystad Energy, saying the halt was “preventing 15 million barrels per day of crude oil from reaching markets” and warning “Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil.”

Analysts and industry groups flagged several downside scenarios for energy markets if the outage persists. Firstpost reproduced Goldman Sachs’ analysis that a disruption longer than two months would likely lift European natural gas prices above €100 per megawatt-hour, roughly $35/mmBtu, and “trigger more significant global gas demand destruction.” FinanceMagnates cited Goldman’s separate calculation that an $18 per barrel real-time oil risk premium was already priced in, while Wood Mackenzie warned oil could reach $100 a barrel if the strait remained closed.

Operational dynamics are tightening the shock. Jeff Mower and S&P Global CERA analysts told FinanceMagnates that even if production and terminals stayed intact, halted tanker traffic, ship owner caution and delayed shipping fixtures can reduce delivered barrels and sustain higher risk premiums until maritime threats subside. Firstpost noted that Europe’s Dutch TTF benchmark remains well below the extreme levels seen in 2022, but the Goldman scenarios suggest that could change quickly if shipments are blocked.

Goldman analysts and En Oninvest pointed to a geographic split in vulnerability: the United States is expected to be less affected because it is a major net exporter of LNG and U.S. liquefaction capacity is operating at or near capacity. Outside energy circles, En Oninvest’s market roundup also noted broader moves, such as Bitcoin falling 23% year-to-date.

Experts cautioned that geopolitical escalation would deepen the economic fallout. Vaibhav Chaturvedi, senior fellow at the Council on Energy, Environment and Water, said “The US-Iran war doesn't bode well for the global energy economy. In the short run, we can expect an increase in oil prices. In the medium term, if the war drags, there would be a negative impact on the global economy.” Until maritime threats de-escalate, analysts expect elevated risk premiums and pronounced price volatility across oil and gas markets.