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EMEA Natural Gas Update: European Gas Declines Amid Expectations of Iran-Oman Hormuz Framework

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European natural gas futures declined in after-hours trading on Friday as traders pared recent gains, although ongoing concerns over potential liquefied natural gas supply disruptions in the Middle East continued to underpin the market.

Front-month Dutch TTF contracts fell 0.92% to 55.255 euros ($63.87) per megawatt hour, while UK NBP futures declined 0.96% to 135.600 British pence ($1.83) per therm.

European gas markets remain focused on uncertainty surrounding LNG flows through the Strait of Hormuz. Continued disruption risks have kept global supply balances tight and complicated Europe's storage refill efforts, according to Trading Economics.

Iran and Oman have reached a preliminary consensus on the Strait of Hormuz, though senior officials in both countries must still approve the proposal, Hassan Ghashghavi, spokesman for Iran's Parliament National Security and Foreign Policy Committee, said, according to Mehr News Agency.

The two countries are awaiting a final agreement and joint statement outlining the proposed framework, a step that could ease disruptions around the strategic waterway, Mehr News Agency reported.

"The market is still hopeful about a new US-Iran deal, which could re-open Hormuz, but has to keep the fundamentally unhealthy situation in mind, in which the European gas market currently finds itself," Mind Energy analysts said in a Friday note.

Latest data from Gas Infrastructure Europe showed inventories at 58.13%, down from 70.30% a year ago, with Germany at 47.62% and France at 58.71%.

Traffic through the Strait of Hormuz remained subdued, with only 10 vessel transits recorded on Thursday, highlighting continued disruptions along a route that normally carries about one-fifth of global LNG flows, according to data from ShipFinder.

While prices eased in after-hours trading, uncertainty over LNG exports from the Persian Gulf is expected to keep volatility elevated as traders assess the outlook for shipments through the Strait of Hormuz.

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