TTF Prices Rise on LNG Supply Risks

European natural gas prices climbed to above €59 per MWh on Tuesday, a four-month high, as continued attacks between the US and Iran outweighed reports of diplomatic efforts to ease tensions. Tehran said it had received a proposal from mediators for a 10-day ceasefire aimed at reviving the interim deal reached last month. This comes as the US carried out a tenth consecutive day of strikes against Iran, while Tehran continued retaliatory attacks against neighboring countries. The renewed hostilities have brought tanker traffic through the Strait of Hormuz to a standstill and delayed the anticipated recovery in Qatari LNG exports, reducing available supplies and intensifying competition among European and Asian buyers for cargoes. This makes increasingly difficult for Europe to replenish reserves ahead of winter, with storage facilities currently around 53% full, compared with roughly 64% a year ago and about 15 percentage points below the five-year average.

European natural gas prices surged as high as €60.5 per MWh during Asian trading on Monday, marking a four-month high, before trimming gains to around €58.5, amid mounting fears of deeper supply disruptions as hostilities between the US and Iran escalated over the weekend. The US Central Command said on Sunday that it had carried out a fresh round of strikes against Iran for the ninth consecutive night, while Kuwait and Bahrain reported Iranian attacks. The conflict has widened beyond military targets to include bridges, utility infrastructure, and port facilities, increasing the risk of a return to full-scale war. Shipping activity through the Strait of Hormuz has largely come to a halt, with the US enforcing a naval blockade on Iranian ports and Tehran targeting vessels it says are violating its regulations. These supply risks, coupled with stronger demand for power generation, are making it more difficult for Europe to refill its vast storage facilities before winter.

European natural gas prices climbed above €56 per MWh on Friday, the highest in nearly four months, amid increasing threats to Persian Gulf supplies as US-Iran attacks intensified. The US carried out fresh strikes on Iran on Thursday, following previous attacks that struck an unladen oil tanker bound for Iranian ports after the reimposition of a blockade. Tehran has countered with attacks targeting US military bases in neighboring countries and has reportedly called Yemen’s Houthi rebel group to shut the Red Sea export route if Washington targets Iranian power infrastructure. EU gas prices have surged over 15% this week and more than 29% so far in July, erasing an over 14% decline in Q2, as supply disruptions and stronger power generation demand constrain Europe’s ability to rebuild inventories before winter. Supply concerns were exacerbated after Qatar, the Middle East's largest LNG exporter, halted plans to boost production after one of its tankers was attacked near Hormuz.