European gas prices jumped more than 5% on Wednesday after reports that the United States was preparing to extend its blockade of Iranian ports, deepening fears of a prolonged disruption to global energy supplies and shipping routes.
The benchmark Dutch front-month contract at the TTF hub rose 5.35% to 45.93 euros per megawatt hour by 1339 GMT, while the British front-month contract gained 5.16% to 114.00 pence per therm.
The Wall Street Journal reported that U.S. officials said President Donald Trump had instructed aides to prepare for a sustained blockade of Iranian ports to increase pressure on Tehran. The move came after Iran warned of “unprecedented military action” if Washington continued seizing Iran-linked vessels.
Energy Shock Ripples Across Europe
The escalating confrontation has intensified concerns over the security of energy flows through the Strait of Hormuz, a critical artery for global oil and liquefied natural gas shipments.
In response, Britain said it had asked domestic refineries to maximise jet fuel production to bolster supply resilience as airlines grapple with soaring fuel costs. Low-cost carriers including Ryanair, Transavia and Volotea have begun trimming flights as higher jet fuel prices squeeze margins.
TotalEnergies Delays Middle East Restart
French oil major TotalEnergies said it would not resume Middle East production until shipping through the Strait of Hormuz had stabilised.
Chief Executive Patrick Pouyanné said about 15% of the company’s upstream oil and gas production remained offline because cargoes could not be shipped through the waterway.
“We will wait for a real stabilisation in the Strait of Hormuz before restarting operations,” he told analysts, adding that restarting output would take two to three months.
Pouyanné said higher oil prices and increased production elsewhere had offset losses in the region. He added that, under most scenarios, oil prices were expected to average at least $80 a barrel in 2026.
Europe Eases State Aid Rules
The European Commission said it would temporarily relax state aid rules, allowing member states to support industries hardest hit by soaring energy costs.
The measures will enable governments to provide targeted relief to sectors including farming, fishing and transport, as well as energy-intensive industries facing sharp increases in fuel and fertiliser costs.
Competition Commissioner Teresa Ribera said the bloc needed “immediate” and “proportionate” action to shield businesses and consumers from the economic fallout.
Nuclear Uncertainty Adds to Market Anxiety
Separately, the head of the International Atomic Energy Agency said most of Iran’s highly enriched uranium was likely still stored at its Isfahan nuclear complex.
Director General Rafael Grossi said the agency had not been able to verify the material’s status since inspections were halted during last year’s conflict.
Regional Fallout Widens
In Lebanon, the army said an Israeli strike in the southern town of Khirbet Selm killed a soldier and his brother, underscoring the risk of broader regional escalation despite a ceasefire with Hezbollah.
Meanwhile, Russia said it had not yet decided whether to return personnel to Iran’s Bushehr nuclear power plant, where state nuclear corporation Rosatom is building two additional reactors under a long-term agreement.
