UK Natgas Prices Rise Further

UK natural gas futures rose to 109.3 pence per therm, extending their rebound from a two-week low, amid concerns of prolonged supply disruption due to persistent tensions between the US and Iran. The two sides failed to finalize a US-backed peace proposal, with President Donald Trump calling Iran’s response “totally unacceptable” and accusing Tehran of playing games. This was after reports that Iran had offered to transfer part of its stockpile of highly enriched uranium to a third country while refusing to dismantle its nuclear facilities. The Strait of Hormuz remained largely closed, with the route currently facing restrictions from both sides, choking off around one-fifth of global LNG supply. Although most Persian Gulf gas exports are directed toward Asia, the disruption has tightened global supply and increased competition, fueling concerns in Europe as the region needs to replenish inventories before next winter.

UK natural gas futures rose to 109 pence per therm, recovering from a two-week low as prospects for peace in the Middle East remained uncertain amid renewed tensions. The US military launched strikes on Iranian military targets on Thursday in response to attacks on its three destroyers in the Strait of Hormuz. Meanwhile, President Trump said the ceasefire remains in place despite the strikes, while Iranian TV reported that the situation is “back to normal,” providing some relief. These developments come as the US seeks to de-escalate tensions, while also awaiting Iran’s response to a proposal to reopen the strategic waterway. The near-closure of the strait has disrupted around one-fifth of global LNG supply, with the route facing restrictions from both sides. Although most gas from the Persian Gulf goes to Asia, the disruption has tightened global supply and intensified competition, fueling concerns in Europe as the region needs to replenish inventories before next winter.

UK natural gas futures dropped to around 106.5 pence per therm, the lowest level in two weeks, tracking a broader decline in energy markets as optimism grew over a potential end to the Middle East conflict and a reopening of the Strait of Hormuz. Reports indicated the US and Iran are close to a preliminary agreement that could lead to wider nuclear talks, raising hopes of de escalation and easing supply disruption risks. President Donald Trump also announced a temporary halt to “Project Freedom,” a military operation aimed at securing shipping through the strait, citing progress in negotiations. The conflict and near closure of the key route had removed about a fifth of global LNG supply, pushing UK natural gas prices almost 50% higher. While most Middle East gas flows to Asia, the disruption has tightened global supply and increased competition, leaving Europe on alert as it works to rebuild gas inventories ahead of winter.