EU Natural Gas Falls Further Toward 20-Month Low

European natural gas prices extended gains, rising above €62 per MWh on Tuesday, amid fading hopes for a Middle East peace deal that could facilitate the reopening of the Strait of Hormuz. President Trump said he was in no rush to resolve the conflict and warned of military action against Oman if it obstructed US efforts to reach an agreement with Iran. Also, talks between Iranian and Omani officials over a provisional framework to manage shipping through the strait have yet to yield any concrete results. The continued maritime blockade has delayed LNG shipments from Qatar, limiting supplies available to Europe. At the same time, intense heatwaves across parts of Europe have boosted gas-fired power demand for air conditioning. These factors are slowing the pace of inventory replenishment, leaving European storage levels under greater pressure ahead of the winter heating season.

European natural gas prices climbed above €62 per MWh on Monday, hitting a fresh three-week high amid continued disruption to LNG supplies from the Gulf as US-Iran negotiations stalled. Renewed Israeli strikes against Tehran-backed Hezbollah in Lebanon, along with the latest US threats of additional sanctions on Iran, have further clouded prospects for an imminent agreement to reopen the Strait of Hormuz. Traffic through the waterway has fallen sharply following recent attacks on vessels, highlighting persistent security risks. For Europe, concerns over gas inventories are becoming increasingly pressing, as storage levels remain below historical averages and are lagging the pace needed to comfortably meet pre-winter storage targets. Efforts to rebuild inventories have also been hampered by heatwaves across Southern and Central Europe, which have boosted demand for gas-fired power generation, diverting supplies from storage.

European natural gas prices rose above €61 per MWh on Friday, the highest in three weeks, amid persistent concerns over Europe’s gas supply security ahead of winter. The US on Thursday threatened to keep its naval blockade of Iran indefinitely and vowed to step up economic pressure on the country as ceasefire talks stalled. The standoff has heightened uncertainty around the Strait of Hormuz, with both sides making competing claims of control over the strategic waterway. The disruption has severely delayed LNG cargoes from Qatar, forcing European buyers to compete aggressively with Asian importers for limited supplies. This is making it harder and more costly for Europe to rebuild gas inventories before winter, with storage facilities currently only 59% full, below historical averages. Meanwhile, heatwaves across Southern and Central Europe have boosted gas-fired power generation to meet cooling demand, diverting supplies from storage. European gas prices have risen over 10% this week.