Xinhua Finance, Brussels, March 5 - European natural gas prices have risen sharply in recent days due to the escalation of geopolitical risks caused by U.S. and Israeli attacks on Iran. Analysts believe that the escalation of the situation in Iran is bringing new uncertainties and risks to the European energy market, which may push up inflation in the region again and further put pressure on the regional economy.

According to a report by The Wall Street Journal, since the outbreak of the war, European natural gas prices have surged sharply, having risen by approximately 70% so far. With the obstruction of navigation in the Strait of Hormuz, transportation through this globally important energy channel has been significantly affected.

Simone Tagliapietra, a senior fellow at the European think tank Bruegel, said: "Now we may be at the beginning of another energy crisis. This is a wake-up call for everyone.

Analysts pointed out that if the war lasts longer, energy supplies in the Middle East may be further disrupted, which will eventually affect European households and businesses, and prices from electricity to food may rise.

Analysis institution Capital Economics predicts that if energy prices remain at current levels, the euro zone's inflation rate may rise by about 0.5 percentage points. According to the preliminary statistics released by Eurostat on the 3rd, the inflation rate in the euro zone in February was 1.9% on an annual basis, up from 1.7% in January, which further intensified market concerns about an inflation rebound.

Europe's natural gas supply structure is also facing new uncertainties. Following attacks on two facilities, Qatar Energy recently stated that its production would be affected as a result. The reduced supply may intensify competition between European and Asian buyers.

Currently, Europe is facing problems in replenishing its natural gas storage, with natural gas inventories accounting for only about 30% of the storage capacity. Industry data shows that the inventory in Germany's gas storage facilities is approximately 21% of the storage capacity, which is a relatively low level for the same period in recent years. Analysts point out that the peak period of winter heating demand has passed, and Europe is unlikely to experience a natural gas shortage in the short term, but it will face greater pressure to replenish inventories for the next winter. The European Union has planned to hold a meeting of energy experts and requires member states to submit their respective national energy reserve assessment reports.

The EU has pledged to reduce risks through diversifying supplies, including seeking new natural gas sources and developing solar energy and wind energy projects. In addition, leaders of many European countries have traveled to the Middle East to secure natural gas supply agreements and promoted energy-saving technologies such as heat pumps through subsidies.

However, Jan Rosenow, a professor of energy and climate policy at the University of Oxford, said that the overall situation has not improved significantly, and Europe still relies heavily on imported energy.

Experts point out that the energy issue remains a major structural challenge facing the European economy. Approximately 58% of the EU's energy depends on imports of fossil fuels. After the outbreak of the Ukraine crisis, the EU reduced its reliance on Russian natural gas but significantly increased imports of liquefied natural gas from the United States.

The rise in energy costs has already had an impact on the competitiveness of European industries. Analysts believe that if natural gas prices rise further, the operational pressure on European industrial enterprises may continue to increase. This week, the stock prices of industrial companies such as Siemens Energy and BASF have seen the largest declines.

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