As the US and Iran continue to trade blows, the oil market has finally woken up to the risk that energy flows might not resume as hoped. European gas prices, meanwhile, are at their highest level since March having risen by almost 30 per cent in the last month. Every day that the strait remains part-closed raises the chance that Europe will face giant heating bills this winter.
To understand why, take a step back and look at how the market survived the loss of 20 per cent of global liquefied natural gas during the war in Iran, emerging relatively unscathed. The answer is that over half of the shortfall, on Wood Mackenzie numbers, was offset by new projects that had recently started up, mainly in the US.
For the rest of it, Asian demand for LNG fell as coal stations increased output, and European countries took advantage of spring to delay filling huge underground storage facilities, on which they rely for winter heating. These are currently just above half full, compared to a more usual 60 per cent at this time of year.