European Gas Extends Surge

European natural gas prices climbed to around €52.8 per MWh on Tuesday, the highest in more than three months, after President Donald Trump ordered the resumption of a blockade on Iranian ports and declared a 20% security fee on cargo shipments through the Strait of Hormuz. The blockade is set to take effect at 4:00 p.m. EDT on Tuesday, dashing hopes for a near-term normalization of shipping activity through the waterway. LNG exports from the Middle East had only recently begun to recover, with Qatar ramping up production and shipments following the US-Iran interim agreement in June. However, the renewed hostilities have abruptly halted that recovery, raising concerns over fresh disruptions to LNG exports from the region. Such disruptions could tighten global gas supplies just as Europe is racing to refill storage facilities ahead of the next winter.

European natural gas prices rose more than 5% to around €51.4 per MWh on Monday, recouping losses from the previous session as renewed attacks between the US and Iran heightened concerns over LNG shipments through the Strait of Hormuz. The US Central Command said American forces launched another wave of strikes on dozens of targets across Iran, aimed at weakening Tehran’s ability to threaten maritime traffic through the strategic waterway. Iran retaliated by attacking countries in the region hosting US military forces, including Kuwait, Bahrain, and Jordan. Conflicting statements over the status of the strait added to uncertainty, with the US saying the waterway remains open, while Iran claimed it had closed the passage "until further notice." Market participants remain on high alert, as any prolonged conflict or direct damage to LNG export infrastructure in the Gulf could complicate Europe's efforts to replenish storage ahead of the winter heating season.

European natural gas prices dropped nearly 3% to around €48.8 per MWh on Friday, pulling back from a one-month high amid reports of continued US-Iran negotiations despite recent military exchanges. A US official reaffirmed Washington's commitment to pursuing a diplomatic resolution with Tehran, easing concerns of a return to full-scale war and once again disrupt supplies from the Persian Gulf. Prices had surged more than 12% over the previous three sessions after the US carried out new strikes on Iranian targets in response to attacks on vessels in the Strait of Hormuz. Iran retaliated by targeting US bases in the region over the past two nights. While President Trump declared that the ceasefire was over, he said he would not prevent talks from continuing. Investors remain focused on energy flows through the strait, which handles around one fifth of global oil and LNG trade, as any renewed disruption could complicate Europe's efforts to replenish inventories ahead of the winter.