UK Natural Gas Futures Pull Back

UK natural gas futures rose above 75 pence per therm as geopolitical tensions lifted supply risk premiums. Comments from Donald Trump that Iran is rebuilding its nuclear program increased speculation about potential military action and the risk of disruption in the Strait of Hormuz, a key shipping lane for nearly 20% of global LNG flows, largely from Qatar. Any blockage of the waterway would tighten global gas availability. The UK is particularly exposed due to its reliance on imports and limited storage capacity. Domestic inventories are only about 27.6% full, with facilities such as Humbly Grove Energy at 9.6%, Storengy UK at 24.3% and Uniper Energy Storage Ltd at 52.2%, leaving the country vulnerable to external supply shocks.

UK natural gas futures dropped more than 5% to below 78 pence per therm after Donald Trump said he is considering a limited military strike on Iran, giving Tehran up to 15 days to reach a nuclear agreement. The main risk remains a potential Iranian move to block the Strait of Hormuz, a critical shipping lane through which nearly 20% of global LNG flows, largely from Qatar. Any closure would significantly tighten global gas markets. The UK is particularly exposed because it depends heavily on imports and has limited storage capacity. Domestic gas inventories are only about 29.4% full, with sites such as Humbly Grove Energy at 9.6%, Storengy UK at 24.3%, and Uniper Energy Storage Ltd at 58.8%. Low reserves leave the country vulnerable to external supply shocks.

UK natural gas futures climbed to above 82 pence a term on renewed geopolitical risk, recovering from a six-week low near 71.13 on February 17 as concerns grew about possible disruptions to LNG and oil shipments through the strategic Strait of Hormuz. Iran’s Revolutionary Guard held military drills in the strait, including a temporary closure for exercises, underscoring how tensions with the US could threaten energy routes. US Vice President JD Vance said recent nuclear talks with Iran did not address US “red lines” and emphasized President Donald Trump’s right to use force if diplomacy fails. Meanwhile, Iran’s foreign minister described the discussions as “constructive,” and further negotiations are expected. The UK remains highly sensitive due to limited storage capacity and heavy reliance on imports. Domestic storage is around 32.4% full, with Humbly Grove Energy at 10.4%, Storengy UK at 24.3%, and Uniper Energy Storage Ltd at 69.5%.