Gas prices have surged by over 40% since the outbreak of the Israel-Hamas conflict on October 7, with Liquefied Natural Gas spot prices hitting $18.345 per million British thermal units on October 16, according to S&P Global Commodity Insights.

This substantial increase in gas prices can be directly attributed to the ongoing Israel-Hamas conflict, which has triggered geopolitical concerns and led to the tragic loss of numerous lives.

The situation continues to be a matter of great concern, with the United States urging caution to prevent further escalation.

Market uncertainty has been further exacerbated by the Israel-Hamas conflict and operational challenges faced by Chevron in Australia.

Chevron Corp had to halt production at the Tamar natural gas field off Israel’s northern coast.

The prolonged shutdown of the Tamar field could disrupt Israeli gas exports to neighboring countries, particularly Egypt, a key gas exporter to the European market.

While the European Union is not expected to experience severe supply problems this winter, the ongoing global gas disruption is likely to keep prices high, potentially opening opportunities for African LNG exporters, such as Nigeria.

However, Nigeria is grappling with its own domestic challenges related to gas supply.

So far, the impact of energy market disruption has been primarily limited to the Eastern Mediterranean, where flows of gas have been significantly affected.

Flows of Israeli gas to Egypt via the offshore EMG pipeline have been suspended, and exports have been rerouted through the FAJR pipeline in Jordan due to the Tamar platform’s production shutdown.

This situation affects the offshore route for Israeli gas to reach the Egyptian market and runs parallel to the Gaza Strip, which is at the center of the conflict.

Although there is currently no major disruption to oil or gas infrastructure near the Gaza Strip or southern Israel, the situation remains highly volatile.

Israel’s gas production has been affected by the conflict, leading to concerns about potential impacts on downstream operations, including Israeli refineries and shipping operations within the conflict zone.

This crisis has also had an impact on global oil markets, as the fear of the conflict spreading further in the Middle East has contributed to rising oil prices.

Increased geopolitical risks, such as the conflict in Ukraine and sanctions against Russia, have further fueled this upward trend in oil prices.

While gas and oil infrastructure may not be directly affected by the conflict, the Israel-Hamas situation continues to disrupt energy markets and have broader implications for the global economy.