UK Natural Gas Futures Edge Up

UK natural gas futures edged up to around 138 pence per therm as supply risks countered softer demand. er to around €55 per MWh as supply risks offset weaker demand, with geopolitical tensions remaining in focus. President Donald Trump said a deal to end military operations in Iran is likely but warned of major strikes on key infrastructure including Kharg Island if the Strait of Hormuz is not reopened. About a fifth of global LNG normally passes through the Strait of Hormuz, but traffic has nearly halted since strikes on Iran began on February 28. With little sign of de-escalation, geopolitical tensions continue to support prices despite weaker near-term fundamentals. Gains remain limited as Europe benefits from stronger wind generation and milder temperatures, which are expected to reduce power sector demand in early April. Still, UK gas prices have surged roughly 75% over March, reflecting ongoing strain in energy markets as the blocked strait disrupts key supply routes.

UK natural gas futures dropped to 138 pence a therm, extending losses for a second session after President Donald Trump announced a five day pause on US strikes against Iranian energy infrastructure following discussions aimed at ending the conflict. Trump said talks had been productive and would continue through the week, raising hopes of de escalation. Energy markets have been volatile since the war began, with the Strait of Hormuz largely blocked, disrupting key supply routes. A potential easing of tensions could allow some flows to resume, though much depends on whether shipping activity returns. Last week, both sides carried out a series of strikes targeting energy infrastructure, including Qatar’s Ras Laffan facility, the world’s largest LNG plant. Meanwhile, global LNG exports fell to a six-month low, underscoring tightening supply conditions. Shipments dropped roughly 20% to 1.1 million tons, driven mainly by declines from Qatar and, to a lesser extent, the UAE.

UK natural gas futures dropped to around 155 pence per therm, pulling back from a more than three-year high, after the US signaled potential measures to increase supply. Treasury Secretary Scott Bessent said the US may soon remove sanctions on Iranian oil stranded on tankers and signaled the possibility of additional crude releases. President Trump also stated that he would not be deploying troops, while Israel pledged to refrain from further strikes on key Iranian gas field. These come after Iran retaliated for Israel’s attack on its South Pars gas field by striking Qatar’s Ras Laffan Industrial City, home to the world’s largest LNG export facility. In addition, leading European nations, Japan, and Canada have expressed readiness to support efforts to ensure safe navigation through the Strait of Hormuz. However, investors remain on edge, given the UK relies heavily on imported natural gas, and following a cold winter, European gas reserves are expected to be lower than usual.