UK Gas Prices Extend Decline

UK natural gas prices dropped to around 138 pence per therm on Tuesday after tumbling more than 8% in the previous session, as President Donald Trump expressed optimism about diplomatic efforts to ease tensions with Iran. Trump said on Monday that the US and Tehran were having "good talks" and that there was a chance of reaching a deal, but he warned that US strikes would resume if negotiations failed. His comments followed a pause in hostilities between the two sides to allow room for diplomacy. Despite this, concerns over Europe’s gas supply persist, with the bloc's storage levels at risk of falling short of its winter refill targets. The renewed escalation of the conflict in early July disrupted the recovery of LNG exports from Qatar, the Middle East’s largest LNG supplier, and with shipping through the Strait of Hormuz still largely blocked, it remains uncertain when additional supplies from the region could reach global markets.

UK natural gas prices plunged 6% to around 143.5 pence per therm on Monday, retreating from a four-month high as the pause in US-Iran attacks eased concerns over deeper supply disruptions. The US halted further attacks on Iran since Friday after 13 consecutive nights of strikes, prompting Tehran to suspend its retaliatory operations. The pause came as Iranian and Omani officials held talks on shipping through the Strait of Hormuz. However, concerns over Europe’s gas supply security ahead of winter remain, as the near-closure of the Strait curtailed LNG flows from the Persian Gulf, intensifying competition with Asian buyers. Hot weather across the region has also boosted electricity demand. European gas storage facilities were currently 54.2% full, well below the 65% level recorded a year earlier, and Equinor, the bloc’s largest gas supplier, warned last week that Europe is unlikely to reach its target of 80% storage capacity before the start of winter.

UK Gas increased to 154.73 GBp/thm, the highest since March 2026. Over the past 4 weeks, Natural Gas UK gained 60.1%, and in the last 12 months, it increased 89.13%.