TTF Prices Surge 5%

European natural gas futures extended gains to more than 6%, approaching €49 per megawatt hour, as renewed geopolitical tensions raised concerns over global energy supplies. Prices were supported by reports that Iran would suspend exchanges of messages with the US in protest over Israel’s escalating military operations in Lebanon. Tehran accused Washington of sending mixed signals and delaying negotiations, while Foreign Ministry spokesperson Esmail Baghaei said Iran continued to engage with the US with “distrust.” President Donald Trump maintained that talks on an interim peace deal would “work out well,” despite renewed clashes near the Strait of Hormuz. The waterway has remained largely closed for three months, heightening concerns about LNG flows and Europe’s ability to rebuild gas inventories ahead of winter. European storage facilities are currently around 38% full, well below the five-year average of more than 50% for this time of year.

European natural gas futures rose above €48 per MWh, rebounding after a sharp decline last week as uncertainty persisted over a potential US–Iran agreement. Both countries traded messages proposing changes to a draft deal intended to extend their ceasefire and reopen the Strait of Hormuz, although it remained uncertain whether the talks were advancing meaningfully. Tensions in the wider region also escalated, with Israel and Iran-backed Hezbollah in Lebanon exchanging heavy cross-border strikes, while an Iranian ballistic missile struck a Kuwaiti air base. The Strait has remained largely closed for three months, and the prolonged disruption has heightened concerns that Europe could face difficulties rebuilding already relatively low gas storage levels ahead of winter.

European natural gas futures rose to €47.5 per MWh but were on track for a weekly loss of over 2%, as markets weighed the prospect of a US-Iran peace deal that could resume flows from the Persian Gulf. Reports suggest that the two sides have reached a draft 60-day ceasefire and a framework for nuclear talks, which now awaits final approval from President Trump. However, comments from US Vice President JD Vance that a deal is "close" but "not there yet" capped price declines. An agreement could restore traffic through the Strait of Hormuz, which has remained largely closed for three months now. Prolonged disruption has raised worries that Europe could struggle to rebuild already relatively low storage levels ahead of next winter. Meanwhile, Europe is experiencing its first major heatwave of the season, with record temperatures forecast in cities such as London, Paris, and Madrid. European gas prices are poised for a second weekly decline, but were up nearly 3% for the month.