European gas prices have soared by 18% due to the potential for strike action by workers in Australia, which could cause significant disruptions to global supplies.
The energy markets have been tense since last week when news broke that employees at critical gas facilities in Australia were contemplating going on strike.
Such strikes, potentially occurring at Woodside and a Chevron facility in Australia, might cut off up to 10% of the global supply of LNG, according to Bloomberg reports.
Negotiations are set to occur between union representatives and Woodside Energy Group, a major global supplier of liquid natural gas (LNG). The possibility of additional strikes at other facilities is also on the horizon.
While Europe does not frequently purchase natural gas from Australia, any disruption in global supplies could reverberate throughout the continent. Futures for the upcoming month in Europe surged by 18% on Tuesday, and UK contracts escalated by over 15%.
Since Russia’s invasion of Ukraine—which significantly reduced Europe’s oil and gas supplies—energy supplies have turned into a global point of contention, triggering a spike in prices last year.
While current prices are substantially lower than the peak levels seen last summer, analysts are cautioning that further disruptions could set off a spiral in prices once again.
