European Gas Prices Set to Jump

European natural gas futures hovered around €46.6 per megawatt hour, after rising for three consecutive sessions on worries of a more prolonged supply disruptions. President Donald Trump’s rejection of Iran’s response to a US proposal aimed at ending the conflict has heightened fears that the 10-week-old war could drag on and further disrupt shipping through the Strait of Hormuz. Hopes for a durable ceasefire have also faded. The near-closure of the strait has cut around one-fifth of global LNG supply, with the route currently blocked by both sides. Although most gas exports from the Persian Gulf typically head to Asia, the disruption has tightened global supply and intensified competition for cargoes. This has raised serious concerns for Europe, particularly as the region needs to rebuild gas stocks ahead of winter.

European natural gas futures extended their gains, climbing toward €47 per MWh as the US and Iran failed to reach agreement on a US-drafted peace proposal, leaving the Strait of Hormuz largely closed. President Donald Trump rejected Iran’s response to the proposal, calling it “totally unacceptable” and accusing Tehran of playing games. This was after reports that Iran had proposed transferring part of its stockpile of highly enriched uranium to a third country and refused to dismantle its nuclear facilities. Trump expressed skepticism about diplomatic progress, saying he is “highly unlikely” to extend their ceasefire. The near-closure of the strait has choked off around one-fifth of global LNG supply, with the route currently blocked by both sides. While most Middle East supply goes to Asia, the disruption has tightened global supply and intensified competition for cargoes. The situation is critical for Europe, which needs to refill storage ahead of next winter.

European natural gas futures rose above €44 per MWh on Friday, rebounding after three straight sessions of losses, as renewed fighting between the US and Iran raised uncertainty over the prospects for a peace deal. The US said its forces struck Iranian military facilities on Thursday in response to attacks on guided-missile destroyers transiting the Strait of Hormuz. Meanwhile, markets found some relief after President Donald Trump said the ceasefire remains in place despite the strikes, while Iranian TV reported that the situation returned to normal. The latest clashes came as Washington seeks to de-escalate tensions while awaiting Iran’s response to a proposal to reopen the key waterway. The near-closure of the strait has choked off around one-fifth of global LNG supply, with the route currently blocked by both sides. While most Middle East supply goes to Asia, the disruption has tightened global supply, fueling concerns in Europe as it works to refill storage ahead of next winter.