European Gas Prices Decline

European natural gas futures jumped over 4% to €52.3 per megawatt-hour on Tuesday, following US President Donald Trump’s escalated threats against Iran if his conditions for reopening the Strait of Hormuz are not met by his 8 p.m. Eastern Time deadline. Trump warned that US forces could destroy “every bridge in Iran by midnight tomorrow” and render power plants “burning, exploding, and never to be used again.” He stressed that freedom of navigation through the Strait must be guaranteed, calling its reopening “a very big priority.” European gas, now just over 28% of storage capacity, faces pressure from potential prolonged supply disruptions. While most Middle East LNG usually heads to Asia, continued curbs could intensify competition for the limited global pool. Traders note that Iran has yet to permit any LNG carriers through the strait during the war, sharply reducing traffic and leaving roughly one-fifth of global LNG output offline, fueling price spikes across Europe.

European natural gas futures dropped to €49.5 per MWh on Tuesday after earlier rising more than 1% as President Trump’s deadline for Iran to reopen the Strait of Hormuz approaches with no signs Tehran will comply. Trump warned that failure to do so would prompt US strikes on Iranian power plants and other civilian infrastructure. Iran rejected the demand and a mediated proposal for a temporary ceasefire. The standoff heightened fears of a deeper global supply squeeze. With Europe’s gas storage critically low at roughly 28%, the region remains highly vulnerable to supply shocks, especially as competition with Asian buyers for LNG cargoes intensifies. Still, the upside in gas prices was partly capped by warmer weather and higher renewable power output, which are dampening demand. Meanwhile, two Qatari LNG carriers aborted an attempt to exit the Strait in what would have been the first Qatari LNG exports since the war began.

European natural gas futures rose to €50 per MWh, recovering from an over three-week low after President Donald Trump's address on Iran dampened hopes for an imminent ceasefire. Trump warned that the US would strike Iran extremely hard over the next two to three weeks, and that the Strait of Hormuz would reopen “naturally” once the conflict ends, though he provided no concrete timeline or details. Iran on Wednesday also denied Trump’s claim that it had requested a ceasefire. Traffic through the Strait has been near a standstill since fighting began, disrupting roughly 20% of global LNG trade. Europe’s gas storage is running low, standing at 28%, heightening vulnerability as competition with Asia for LNG intensifies. EU officials have urged member states to prepare for prolonged disruptions and are considering reviving energy-crisis measures used in 2022. Price increases were capped by warmer weather and increased renewable power output, which reduces demand.