EU Natural Gas Prices Rise Sharply

European natural gas futures dropped more than 2% to around €47 per megawatt hour, easing from a four-week high after the US downplayed the risk of a renewed conflict with Iran following recent clashes in the Strait of Hormuz and missile strikes on the United Arab Emirates. US officials said the incidents did not breach the ceasefire in place for nearly a month, helping calm market fears. The standoff between Washington and Tehran continues with little progress toward new talks, as Iran calls for the removal of a naval blockade while the US maintains pressure on its oil exports. Since the conflict began in late February, LNG flows from the Persian Gulf have largely stalled, disrupting about one-fifth of global supply and raising concerns in Europe as it seeks to rebuild gas inventories ahead of winter. Prices have risen about 40% since the war began, but have recently eased as some Asian demand softened.

European natural gas futures dropped to €47.7 per MWh on Tuesday but held on to most of the prior session’s gains, as fighting intensified between the US and Iran around the Strait of Hormuz, which also drew in the UAE. The US said it struck seven Iranian fast boats in the strait and denied Iran’s claim that it had hit American warships. Meanwhile, the UAE said it intercepted multiple Iranian drones and missiles, and a fire broke out in Fujairah following an attack, marking the first reported Iranian-linked strike since a fragile ceasefire took hold in early April. The key waterway has been effectively closed for the past two months, cutting roughly one-fifth of global LNG supply. European gas prices have climbed about 40% since the war began, as the blockage tightened global supply and increased competition for cargoes, though prices have eased from peak levels amid reduced imports from some Asian buyers.

European natural gas futures rose to almost €49 per megawatt hour as tensions in the Middle East escalated again. The UAE reported intercepting Iranian cruise missiles aimed at several locations across the country, shattering the tenuous calm that had settled in after the ceasefire in early April. The Strait of Hormuz, has been effectively closed since late February and has disrupted roughly a fifth of global LNG flows. European gas prices have risen about 40% since the conflict began, as the blockage tightened global supply and increased competition for cargoes, though they have eased from peak levels as some Asian buyers reduced imports.