TTF Prices Fall Further to 18-Month Low

European natural gas futures fell almost 5% to around $31.7 as comments from Donald Trump about a possible limited strike on Iran eased fears of major disruption to LNG flows through the Strait of Hormuz. Markets had been concerned that escalating tensions could threaten shipments via the strait, a key route for roughly 20% of global LNG exports, including volumes from Qatar. Despite reports of military drills by Iran and a US buildup in the region, traders appeared to price in a lower risk of immediate supply interruption. Additional pressure came from milder weather forecasts, steady Norwegian flows despite outages and stronger renewable generation in Germany. However, inventories in the European Union remain low at around 32%, with German storage below 22%.

European natural gas futures rose to €33 per megawatt-hour, extending a 6.9% gain from the previous session, as fears grow that escalating tensions between United States and Iran could disrupt LNG flows through key Middle East routes. Markets are focused on shipments via the Strait of Hormuz, a route for about 20% of global LNG, including exports from Qatar, the second largest exporter. A report from Axios said US military action against Iran could come sooner than expected, with Israel pushing for regime change, raising risks to regional supply. Tight EU inventories add support, with European Union storage near 32.5%, the lowest since 2022, and Germany below 23%. Still, warmer weather, steady flows despite outages in Norway and stronger renewables in Germany are easing pressure.

European natural gas futures climbed more than 5% to above €31 per megawatt-hour on renewed geopolitical risk, recovering from a five-week low near €29.88 on February 17 as concerns grew about possible disruptions to LNG and oil shipments through the strategic Strait of Hormuz. Iran’s Revolutionary Guard held military drills in the strait, including a temporary closure for exercises, underscoring how tensions with the US could threaten energy routes and add a risk premium to markets. US Vice President JD Vance said recent nuclear talks with Iran did not address US “red lines” and emphasized President Donald Trump’s right to use force if diplomacy fails, keeping political uncertainty high. Meanwhile, Iran’s foreign minister described the discussions as “constructive,” and further negotiations are expected. Inventories across the EU remain low at under 34%, the weakest since 2022, with Germany below 24%, leaving markets sensitive to possible supply shocks.