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EMEA Natural Gas Update: Futures Climb as Hormuz Conflicts Further Threaten LNG Flows

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European natural gas futures rose in after-hours trading on Thursday as renewed military activity around the Strait of Hormuz heightened concerns over LNG supply disruptions, adding to worries over Europe's relatively low gas inventories ahead of winter.

The front-month Dutch TTF contract gained 1.118% to 49.570 euros ($56.70) per megawatt hour, while the UK front-month NBP contract rose 2.913% to 120.100 British pence ($1.61) per therm.

TTF prices climbed as high as 50 euros/MWh on Thursday, their highest level in a month, after surging more than 5% in the previous session as renewed conflict between the US and Iran fueled concerns over potential disruptions to LNG supplies from the Persian Gulf through the Strait of Hormuz, Trading Economics said.

The US has targeted more than 170 Iranian military sites near the Strait of Hormuz over the past two days, the US military's Central Command confirmed toon Thursday. The strikes were intended to weaken Iran's ability to target commercial shipping in the strategic waterway, and US forces carried out about 14 times as many strikes during the past two days as the number of targets hit in June during the previous escalation, it said.

Renewed fighting has also prompted QatarEnergy, the largest LNG producer in the world, to suspend plans to ramp output back up at its Ras Laffan LNG complex after one of its tankers was attacked in the Strait of Hormuz, Bloomberg reported Thursday. The company has also scaled back operations and reduced scheduled tanker arrivals as a precaution, the report said.

The move could further tighten global LNG supplies and intensify competition between Asia and Europe for spot cargoes ahead of winter.

In the meantime, another heatwave is already developing across the Atlantic. Portugal and southern Spain are expected to see temperatures climb to 43 degrees Celsius (109 degrees Fahrenheit) this week, while France and the Benelux region prepare for another burst of extreme heat. Parts of Central Asia are also facing temperatures around 40 degrees Celsius, MSN reported Thursday.

EU gas inventories stood at 50.88% of capacity, well below nearly 61% at the same time last year, Gas Infrastructure Europe said. Stock levels were also below the five-year average of 66%, according to the Swiss Federal Office of Energy.

The EU Agency for the Cooperation of Energy Regulators, or ACER, said earlier this week that the bloc's LNG imports will need to increase by about 13% from 2025 levels to meet summer demand and reach its 90% gas storage target before winter. The agency said the interim 80% storage target remains achievable with 2025 LNG import levels.

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