European gas benchmarks moved sharply when the U.S.-Israeli conflict with Iran erupted on February 28, 2026. Front-month TTF futures—the key price-setting contract for European natural gas—jumped roughly 25% in a single session by the following Monday, per WSJ live coverage. The moves accelerated. By March 3, TTF had surged 48%, touching its highest level since 2023, driven by reports of a halt in Qatari LNG loadings—a disruption WSJ called "the biggest threat to world gas markets since Russia invaded Ukraine" (WSJ). That same day, separate reporting put the intraday swing at 50%, with prices reaching 48 euros per megawatt-hour, while UK NBP futures rose 41% to 115 pence per therm (Fool.com.au). By week's end, TTF had rallied 67%—its steepest weekly gain since the 2022 energy crisis (Bloomberg).

The transmission channel runs through the Strait of Hormuz. The U.S. Congressional Research Service published analysis on March 11 assessing how the conflict threatened energy flows through this critical chokepoint (CRS). The U.S. subsequently launched retaliatory strikes on Iranian targets following attacks on shipping in the Strait, per CBS News. For traders, the logic was straightforward: Europe still bore scars from losing Russian pipeline gas in 2022. Qatar had become Europe's most important source of marginal LNG supply since then. Any credible threat to Qatari cargoes transiting Hormuz reprices the entire futures curve almost instantly. What traders priced on March 3 was not a confirmed cutoff but the probability-weighted cost of one.

Policymakers responded within days. By March 11, the EU weighed measures to absorb the cost shock, including a gas price cap (Bloomberg). The bloc's experience with the 2022 Market Correction Mechanism—a price cap that was never triggered due to restrictive activation thresholds and drew criticism for it—set expectations low for how quickly a fresh cap could meaningfully restrain liquidity or bid-ask spreads on TTF. By March 26, Reuters reported benchmark European gas had risen more than 60% since conflict onset, above 50 €/MWh, and that Brussels was deliberately scaling back near-term climate targets to manage the energy shock (Reuters). Five days earlier, HSBC had revised its 2026 European gas forecast 40% higher than its pre-war baseline, with prices expected to remain elevated through 2027 (Bloomberg)—a forecast with direct consequences for utility hedging books and industrial power-purchase agreements.

Conditions softened by late May. WSJ reported on May 25 that European gas prices fell 5% on optimism about U.S.-Iran talks, and a U.S.-Iran interim agreement was reached by mid-June, with implications flagged for maritime and tanker-insurance sectors (Holland & Knight). But de-escalation did not mean reversion to pre-conflict levels. Reuters' June 17 assessment is the operative benchmark: average European gas prices remained roughly 31% higher than pre-conflict levels—about 10 €/MWh above January 2026 pricing—nearly four months after the war began, even as the acute Hormuz shock had faded from headlines (Reuters).

The gap between the March spikes and the June baseline reveals something important about how markets function. A 67% weekly surge is a liquidity event—forced short-covering, margin calls, algorithmic momentum chasing a headline. A 31% sustained elevation four months on is a repricing of risk premium: the market's assessment that Hormuz-transiting LNG and Gulf supply carry structurally higher disruption risk than January 2026 had assumed. For treasurers and hedgers, this distinction matters enormously. A spike eventually fades from the curve; a repriced risk premium gets embedded into forward contract pricing, industrial cost pass-through, and eventually headline inflation across the eurozone and UK. HSBC's through-2027 forecast was betting the repricing would stick. The June data suggests the bank was directionally correct, even if the magnitude has moderated from March's extremes.