FINWIRES · TerminalLIVE
FINWIRES

EMEA Natural Gas Update: Futures Edge Lower After the US Pauses Strikes Against Iran

By

European natural gas futures dropped on Monday after tensions between the US and Iran eased over the weekend, with diplomatic negotiations set to resume.

The front-month Dutch TTF contract fell 0.83% to 58.580 euros ($67.50) per megawatt-hour, while the front-month UK NBP contract dropped 0.55% to 143.490 British pence ($1.93) per therm.

While addressing reporters on board the Air Force One on Sunday, US President Donald Trump said that negotiations with Tehran were set to begin on Monday, with the "perimeter" of a deal already in place, as he paused what he described as "the biggest attack since World War Two" against Iran.

Iran's Foreign Ministry Spokesperson, Esmaeil Baghaei, has, however, denied these claims, saying that the country wasn't holding any talks with the US at the moment, according to a report by Al Jazeera.

Meanwhile, traffic along the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, stood at 11 on Sunday, according to ShipFinder.

These developments offer much-needed respite for European markets, which are competing with Asia for cargoes to refill inventories ahead of the winter heating season.

The average daily LNG imports into Asia "has remained above the seasonal average since April," according to Daniel Hynes, a senior commodity strategist at ANZ, putting pressure on European importers.

European gas inventories remained below historic levels, at just 57.11% of capacity, compared to 68.85% 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 73.5%, according to the Swiss Federal Office of Energy.

Related Articles

Oil & Energy

Crude Posts Weekly Loss Despite Middle East Tensions, July Gains Top 20%

Global oil benchmarks ended the week lower as markets trimmed geopolitical risk premiums despite ongoing tensions in the Middle East, while market attention also turned to the OPEC meeting this weekend.West Texas Intermediate settled at $86.80 per barrel, down from $90.47/bbl the previous week, while Brent closed at $90.09/bbl, down from $98.70/bbl a week earlier.WTI futures posted a weekly decline of 5.2%, while Brent futures fell nearly 7%. On a monthly basis, however, both WTI and Brent soared over 20%, capping a volatile July marked by supply disruptions."October Brent dropped toward $85.0 early Friday after Thursday's high above $89 per barrel and September WTI traded near $81.60, still on pace for a large monthly advance as the US-Iran conflict continues to strain shipping through the Strait of Hormuz," Saxo Bank analysts said.The ongoing US-Iran conflict and associated maritime flare-ups kept commercial shipping through the Strait of Hormuz under severe pressure, punctuated by naval interventions, targeted tanker incidents, and Houthi embargo threats against Saudi energy infrastructure.These chokepoint disruptions forced energy markets to continually reprice systemic supply risks, outweighing temporary diplomatic pauses and early-month recovery signals from Persian Gulf flows, analysts noted.The supply squeeze also spread across refined products and export terminals.Global middle distillate margins climbed to fresh multi-month highs as regional conflicts tightened diesel availability ahead of winter, compounded by Russian export bans following refinery disruptions and temporary loading suspensions at the Caspian Pipeline Consortium's Black Sea terminal."The ICE gasoil crack remains near record highs, trading above $70/bbl," ING analysts said.On the supply front, US commercial crude oil inventories fell by 7.2 million barrels to 404.5 mmbbls in the week ended July 24, the Energy Information Administration said in its weekly report on Wednesday.Crude inventories were about 7% below the five-year average for this time of year, the EIA said. The decrease was larger than Macquarie's estimate of a 2.5-million-barrel draw for the week ended July 24.US Strategic Petroleum Reserve inventories dropped to 307.7 mmbbls in the week ended July 24, down from 311.4 mmbbls a week earlier, marking a weekly decline of 3.8 mmbbls, EIA data showed.The weekly US oil rig count increased by one, to 451 in the week ended July 31 from 450 a week earlier, according to data from Baker Hughes (BKR) released Friday. That compared with 410 oil rigs in operation a year earlier.Meanwhile, money managers in the WTI crude futures and options markets increased their net long positions in the week ended July 28, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released Friday.The data showed money managers held 195,035 long positions, up 5,550 from July 21, while short positions fell by 15,852 to 86,728.Meanwhile, the UAE's Abu Dhabi National Oil Company said Friday that it plans to implement changes to the pricing mechanism for its flagship crude grades, in a move that could reshape Middle Eastern crude benchmarks over the longer term.Effective Nov. 1, Adnoc will price its Murban, Das, Umm Lulu and Upper Zakum crude grades using the prompt-month Platts Dubai benchmark and an Adnoc-announced differential, replacing the current methodology based on ICE Futures Abu Dhabi Murban futures.Although late-month developments, including ongoing backchannel peace negotiations, preliminary Persian Gulf supply recoveries, and prospective diplomatic talks, helped trigger short-term price consolidation and weekly pullbacks, cumulative geopolitical risks left both crude benchmarks with strong double-digit percentage gains for the month.In a Cabinet meeting on Friday, US President Donald Trump said American military forces would soon launch attacks on Iran."We'll be hitting them very hard...," Trump said about future plans, warning Iran to expect sustained US military action.The US and Israel were reportedly preparing to launch operations targeting Iran's energy infrastructure over the weekend, according to several media reports late Friday.Market attention has also shifted to the upcoming Organization of the Petroleum Exporting Countries meeting this weekend for clues on potential policy and production decisions.OPEC and its allies are largely expected to stick to their strategy to incrementally raise oil output when seven members meet virtually on Sunday, with the alliance nearing the final stages of completely unwinding production curbs agreed in April 2023, according to sector experts.

$BKR
Oil & Energy

US Oil Update: Crude Rises as Iran Tanker Attacks in Hormuz Fuel Middle East Supply Fears

Crude futures surged to multi-month highs in after-hours trading on Friday as escalating military hostilities in the Middle East and attacks on tankers threaten energy exports through the Strait of Hormuz, one of the world's key energy chokepoints.Front-month West Texas Intermediate crude futures gained 1.1% to $84.50 per barrel, while Brent futures advanced 1.2% to $90.09/bbl.Gelber & Associates strategists said that crude has extended its rally as fresh US strikes on Iranian military targets keep the geopolitical risk premium firmly in place near chokepoints like the Hormuz.President Trump said on Friday that he's losing confidence in Iranian negotiators, signaling that the renewal of armed hostilities in the Middle East could drag on.Speaking during a Cabinet meeting, Trump took issue with missile attacks that Iran launched earlier this week against US forces in Jordan that ended a multi-day pause in fighting."We just want to win... It's very simple: they cannot have a nuclear weapon," Trump told reporters during the meeting at Camp David.Meanwhile, the Persian Gulf Strait Authority said on Friday that passage through the Strait remains unfeasible due to continued "aggressive actions" by US forces in the region.The authority said requests for passage permits would be reviewed and issued gradually once stability is restored, without providing a timeline for when normal operations could resume.Iran's Islamic Revolutionary Guard Corps also said that it attacked two tankers as they tried to transit the Strait under US military escort, according to local media reports. Four other tankers turned back after the strikes.Soojin Kim, research analyst at MUFG, said that though shipping via the strategic waterway has shown signs of improvement, security risks remain elevated as Saudi Arabia seeks to build an international coalition to protect the Red Sea following Houthi attacks.Iran's army said it targeted US military facilities in Kuwait and Bahrain on Friday in response to the US attacks.Tehran said it targeted aircraft shelters, satellite communication systems and equipment storage facilities used by the US military at Kuwait's Ahmad al-Jaber Air Base in a drone strike.On Thursday, Iran's army also claimed to have attacked US facilities at Sheikh Isa Air Base in Bahrain, targeting power generators, navigation systems and support buildings.Commercial shipping through the Strait of Hormuz remained constrained as heightened military tensions, vessel inspections and security warnings pushed tanker operators to limit movements through the strategic waterway.Erik Meyersson, chief EM strategist at SEB Research, said that the conflict has already spread geographically, and Iran's recent attacks have grown less reciprocal and increasingly assertive.The latest data from MarineTraffic showed just five vessel crossings through the Hormuz on July 30, down from 22 a day earlier, marking a 77% decline.MarineTraffic said that all five transits were recorded through Iran's unilateral passage arrangement, with no vessels recorded using the Strait's Traffic Separation Scheme or unidentified routing channels.

Oil & Energy

Energy Efficiency Can Shield SMEs From Price Shocks, Improve Competitiveness, IEA Says

Improving energy efficiency can help small businesses better withstand volatile energy prices while lowering costs and strengthening long-term competitiveness, the International Energy Agency said in a Friday note.Successive spikes in gas, oil and electricity prices have left small and medium-sized enterprises particularly exposed because they often lack the resources to absorb sudden increases in energy costs, the IEA said.The agency said efficiency upgrades can lower energy bills, improve profitability, reduce emissions and make SMEs more resilient to future price shocks. However, limited government support and structural barriers continue to slow investment in energy-saving technologies.SMEs account for more than 90% of businesses worldwide, contribute about 50% to 60% of value added in advanced and emerging economies, and provide over 60% of global employment. Their share of employment rises above 80% in lower-income countries, the IEA said.Because SMEs generally pay more for energy than larger companies, utility costs consume a greater share of their revenue. In 2025, European Union SMEs spent about 4.5% of sales on gas and electricity, compared with 3.1% for larger businesses, the agency said.Limited financing, bargaining power and technical expertise leave SMEs more exposed to energy price swings and economic shocks. The IEA said 35% cite complex procedures and 28% identify high upfront costs as barriers to efficiency investments.Recent disruptions to oil and gas flows through the Strait of Hormuz have renewed cost pressures.Nearly half of US business leaders said higher energy costs are affecting operations, while more than 80% of Malaysian SMEs reported double-digit cost increases and over 20% of Thai SMEs faced possible closure within three months, the IEA said.Despite their exposure to volatile energy prices, only 15% of smaller companies surveyed by the IEA in 2025 had completed an energy audit, compared with 40% of larger firms. Only a quarter of SMEs had invested in digital technologies, versus more than 50% of large companies.The IEA said analysis of more than 4,500 US industrial facilities found the least energy-efficient SMEs can face energy costs up to six times higher per unit sold than the most efficient businesses in the same industry, highlighting significant untapped savings potential.The IEA said SMEs benefit more from energy efficiency upgrades than larger companies. Improvements to cooling, heating and demand management delivered significantly bigger energy cost savings for SMEs than for larger facilities.The savings increase as businesses adopt more measures. An SME implementing four efficiency upgrades can save nearly five times more on annual energy costs than one adopting a single measure, while average savings reach about 12% of yearly energy costs compared with 8% for larger facilities.Matching today's most efficient SMEs could cut the sector's global energy use by about 60%, while a more conservative improvement scenario would still reduce consumption by around 30%.Policies aimed specifically at SMEs remain limited despite their greater exposure to economic uncertainty. The IEA said only 9 of the 85 countries and jurisdictions introducing energy efficiency measures in 2025 and 2026 included SME-focused policies.The IEA said governments can strengthen SME resilience by providing stable long-term policies and expanding targeted efficiency support.