TTF Prices Fall to Over 2-Week Low

European natural gas futures fell below €47 per megawatt hour as optimism grew that the US and Iran could reach a deal to reopen the Strait of Hormuz, a key route for global energy supplies. Sentiment improved despite conflicting signals from both sides, with Iranian state television reporting an unofficial draft of an interim agreement while the White House dismissed the report as “a complete fabrication.” The Strait normally handles around 20% of global oil and LNG flows, and a reopening would ease pressure on energy markets. Prolonged disruption has raised concerns that Europe may struggle to rebuild gas inventories ahead of winter, with storage facilities currently about 38% full compared with a five year average above 50% for this period. Adding to demand concerns, Europe is facing its first major heat wave of the season, with record temperatures expected across cities including London, Paris and Madrid.

European natural gas futures dropped 5% to around €45 per megawatt hour, the lowest in over two weeks, after Iranian state television said Tehran aims to restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, boosting optimism that the US and Iran are nearing a deal to reopen the key energy route. The Strait is critical for global LNG flows, and prolonged disruption could increase competition for limited supplies, complicating Europe’s efforts to rebuild inventories ahead of winter. European gas storage sites are currently around 38% full, well below the five year average of just above 50% for this time of year, while refilling activity has remained slower than usual. At the same time, Europe is facing its first major heat wave of the season, with temperatures expected to break records across cities including London, Paris and Madrid through the rest of the week.

European natural gas prices fell to around €46.8 per megawatt hour on Wednesday, giving up part of the previous session’s sharp gains as investors weighed the prospects of a US-Iran agreement amid renewed hostilities. Earlier this week, the US and Iran exchanged strikes near the Strait of Hormuz, even as Washington signaled progress toward a potential deal. The clashes occurred shortly after President Donald Trump said that talks with Tehran on extending the ceasefire and reopening the strategic waterway were advancing, although Secretary of State Marco Rubio cautioned that finalizing an agreement could still take several days. The near-closure of the Strait has disrupted nearly one-fifth of global LNG flows, with the route remaining blocked by both sides. While most gas from the Persian Gulf goes to Asia, the disruption has tightened global supply and increased competition for cargoes, fueling concerns in Europe as it works to refill storage ahead of next winter.