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EMEA Natural Gas Update: Futures Edge Higher; US Threatens Prolonged Blockade Against Iran

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European natural gas futures edged higher on Friday after the US hinted at a prolonged blockade against Iran, along with the prospect of new sanctions.

Front-month Dutch TTF rose by 0.70% to 60.820 euros ($70.33) per megawatt-hour, while UK NBP futures climbed 0.59% to 149.350 British pence ($2.02) per therm. Both Dutch TTF and UK Gas were up 9.45% and 9.75% over the week, respectively, according to Trading Economics.

On Thursday, US Secretary of Defense Pete Hegseth said that the US can sustain a blockade against Iran "indefinitely", as talks between the two sides hit a stalemate, with no signs of progress.

Meanwhile, US Treasury Secretary Scott Bessent said that Washington was planning on imposing economic measures against Iran that have "never been seen" before.

He said it would be a combination of "economic isolation" and a continued blockade, with no goods moving in or out of Iranian ports, during an interview with Newsmax on Thursday.

Traffic through the Strait of Hormuz held steady with 16 transits on Thursday, according to ShipFinder.

Daniel Hynes, senior commodity strategist at ANZ, highlighted intensifying competition between Europe and Asia for LNG supplies, noting that Indian importers had stepped up spot purchases even as European countries struggled to replenish depleted inventories.

European gas inventories stood at 59.92% of capacity, compared to 72.54% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventories were also significantly below the five-year average for this period, at 76.8%, according to the Swiss Federal Office of Energy.

Forecasts for an exceptionally strong El Nino are expected to ease European natural gas demand during the upcoming winter, with temperatures set to be two degrees Celsius above the historical average, according to a report by Rystad Energy.

This outcome should reduce heating gas demand during the winter, easing pressure on the region's below-average gas inventories.

Forecasters say that such conditions however are less likely than more.

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