TTF Prices Rise on LNG Supply Risks

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.

European natural gas futures fell to below €30 per megawatt hour, the lowest in five weeks, as milder weather forecasts eased near-term demand and reduced pressure on tight supplies. Weather models point to above normal temperatures across parts of Europe in the coming days, offering relief after a volatile start to the year and slowing withdrawals from storage. Inventories across the European Union remain low at under 34% capacity, the weakest since the 2022 energy crisis, with levels particularly depleted in Germany at below 24%. Additionally, natural gas prices in the United States fell to a four-month low on warmer weather, increasing LNG availability for export to Europe.