The "Gas Rush" intensifies: Europe and Asia bidding up TTF and JKM—why has natural gas become the king of energy price elasticity?

I. What Happened? Paralysis at the Strait of Hormuz and Drastic Fluctuations in Global Natural Gas Prices

1. Intense Price Volatility: The Surge in TTF and JKM

After the outbreak of conflict, global benchmark natural gas prices soared rapidly. The Dutch TTF (Title Transfer Facility), Europe’s benchmark natural gas futures contract, saw a significant spike in a short period. Data shows that TTF prices surged from about €30 per megawatt-hour (or $10.6/million Btu) before the conflict to nearly €60 per megawatt-hour at their peak (about $18.8–19.1/million Btu), an approximate increase of 90%. At the same time, Northeast Asia’s spot LNG delivered price (JKM) also skyrocketed from about $10.5–12/million Btu to $18–26.1/million Btu, a surge of 69% to 148%.

2. The Underlying Cause of the Price Surge: Physical Disruption of Core Supply Chains

The main driving force behind this round of natural gas price hikes is the expected physical disruption of the global LNG supply chain. The Strait of Hormuz is an absolute hub for global LNG trade, handling about 20% of all seaborne LNG volume worldwide.

Even more critical is that for Qatar, one of the world’s largest LNG exporters, over 70% of its LNG exports must pass through this strait, with no alternative maritime route available. In 2025, Qatar’s LNG exports are expected to reach about 82 million tons (roughly 106 billion cubic meters), accounting for nearly 20% of global LNG trade volume.

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