In 2022 and 2023, Europe lost around 120bn cubic metres of annual natural gas supply from Russia. That triggered a massive rise in global gas prices, with those in Europe briefly rising more than 10-fold to over €300 per megawatt hour. With hostilities in Iran showing no sign of abating and causing damage to production facilities, a similarly sized disruption to global gas supply is no longer inconceivable. But even in a worst-case scenario, things are unlikely to get quite so bad.
For one thing, 120bn cubic metres is the upper limit of the annual shortfall the conflict in the Middle East could cause. That’s equivalent to losing 100 per cent of liquefied natural gas (LNG) exports from Qatar and the United Arab Emirates plus some loss of exports from Iran and Israel.