European Gas Eases but Supply Risks Persist

European natural gas prices rose above €72/MWh, as Qatar’s prolonged LNG supply disruptions and uncertainty over the Strait of Hormuz raised concerns about gas supplies. QatarEnergy extended its force majeure on LNG deliveries to Italy’s Edison through December, while Pakistan has reportedly secured an extension into November because of difficulties shipping gas through the waterway. Iran has maintained its conditions for reopening the strait after US President Donald Trump rejected its latest proposal, although he indicated that talks could resume this week. The prolonged uncertainty is raising concerns about Europe’s ability to replenish gas inventories before winter. EU officials urged member states to conserve energy and continue filling storage. European facilities are around 71% full, well below the five-year seasonal average of 87%, while Germany’s storage sites are just over 57% full. LNG imports have increased since mid-August, but supply competition remains a key risk.

European natural gas prices rose above €72/MWh on Monday after declining the previous week, as President Donald Trump rejected Iran’s seven-day proposal to reopen the Strait of Hormuz, saying the terms were unacceptable. The move reignited concerns over prolonged disruptions to energy supplies from the Persian Gulf. Reports that Trump expects to resume bombing Iran after the November midterms also added to uncertainty. Despite this, Trump said he expects talks with Tehran to resume this week. Iran, meanwhile, has reiterated its commitment to diplomacy while maintaining its existing conditions. Europe’s relatively low gas inventories was the main concern as the winter heating season approaches, with storage facilities around 70% full, below the five-year seasonal average and the bloc’s target. The EU reportedly warned of a potential energy price crisis stemming from the conflict, calling on member states to curb demand and continue replenishing storage ahead of winter.

European natural gas prices dropped below €72 per megawatt-hour on Friday, paring back the previous session’s gains amid reports of US-Iran discussions over a phased agreement to reopen the Strait of Hormuz and end the US blockade. The strait remains a major sticking point in efforts to resolve the nearly seven-month conflict, with neither side willing to relinquish control of the key waterway. LNG flows from the Persian Gulf remain severely disrupted, intensifying competition between Europe and Asia for limited supplies just as the region races to rebuild inventories ahead of the winter heating season. European gas storage is currently just over 70% full, still below both the seasonal norm and the region’s target, leaving the market vulnerable to further supply disruptions. Maintenance in Norway is also curbing pipeline supplies to Europe, tightening the market further. European gas prices have declined more than 8% over the week.