Eurozone inflation hits 3.3% as Iran war drives energy price surge

European benchmark gas prices surged on Tuesday as the war between the United States and Iran continued to choke off Qatar's liquefied natural gas shipments through the Strait of Hormuz, stoking fears of a painful winter for energy consumers across the continent.

Dutch TTF futures, the region's main gas benchmark, rose above €70 per megawatt-hour, extending a rally that has more than doubled prices since the start of the year. The spike came as fresh data showed eurozone inflation jumped to 3.3% in August from 2.9% in July, driven almost entirely by energy costs that climbed 14.3% year-on-year, according to Eurostat Euronext N.V..euronews+2

Qatar's Deepening Supply Crisis

QatarEnergy has extended its force majeure declaration on LNG deliveries until early November, Reuters reported last week, after notifying Italian utility Edison that five more cargoes scheduled between late September and early November would not arrive. Under the rolling force majeure, first declared in March after Iranian attacks on Qatar's Ras Laffan facility, Edison alone has had 29 cargoes cancelled, containing roughly 3.8 billion cubic metres of natural gas.prothomalo+1

The scale of disruption is stark. According to ICIS data cited by Prothom Alo, Qatar exported just 18 LNG cargoes during the first six months of the conflict, compared with 509 in the same period a year earlier, costing the country about $24 billion in lost revenue. Anne-Sophie Corbeau of Columbia University's Centre on Global Energy Policy said QatarEnergy has been unable to provide any assurance on when normal exports will resume.prothomalo

Winter Storage Gap Widens

EU gas storage stood at roughly 63% as of late August, according to Gas Infrastructure Europe data cited by Investing.com, raising doubts about whether the bloc can meet even its flexible 75% target by November. Columbia University research published earlier this year found Europe entered the 2026 injection season with its lowest storage since 2018.investing+1

Countries most exposed include Pakistan, Bangladesh, and India, which rely heavily on Qatari LNG and lack diversified long-term contracts, Corbeau said. While LNG exports from the United States, Canada, Nigeria, and Malaysia have increased, they have not fully offset Qatar's absence from the market.prothomalo

ECB Under Pressure

ECB policymaker Olli Rehn warned in a Financial Times interview published Tuesday that the central bank must prepare for an extended "conflict of attrition" in the Middle East. "We must show no complacency in the face of these inflationary pressures," Rehn said, citing energy prices pushed up by the near closure of the Strait of Hormuz. Markets widely expect the ECB to raise interest rates by a quarter point at its September 10 meeting.live.euronext+2

Oxford Economics senior economist Leo Barincou said inflation should remain "well above target into next year, as higher gas and food prices put additional upward pressure on the index".euronews