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EMEA Natural Gas Update: Futures Rally After Tanker Attack Revives Hormuz Supply Fears

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European natural gas futures soared on Tuesday after a tanker was struck by three projectiles along the Strait of Hormuz, leading to heightened tensions over Europe's gas supplies heading into the heating season.

Front-month Dutch TTF contracts rose 2.28% to 71.400 euros ($82.78) per megawatt hour, while UK NBP futures rose 6.69% to 175.850 British pence ($2.38) per therm.

On Tuesday, a tanker transiting outside the Strait of Hormuz was struck by three unidentified projectiles about 17 nautical miles east of Khasab, Oman, according to the UK Maritime Trade Operations. No casualties were reported, even as the organization advised vessels transiting the area to exercise caution.

This comes after the US and Iran exchanged strikes earlier this week, for the first time in a month, marking a fresh escalation in the ongoing crisis.

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

Daniel Hynes, senior commodity strategist at ANZ, said the latest attacks had once again dashed hopes of a resumption in Middle Eastern gas flows, with "barely any LNG tankers making the risky journey" since a Qatari LNG carrier was attacked in early July.

According to Hynes, the "only saviour" for European buyers ahead of the upcoming winter is weaker demand from leading Asian buyers, while noting that China's LNG imports were set to drop 18% year-over-year this month, citing ship tracking data.

European gas inventories remained below seasonal averages, at just 69.05% of capacity, compared to 77.38% 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 81.9%, according to the Swiss Federal Office of Energy.

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US Crude Prices Seen Under Pressure as Hormuz Flows Recover, Stocks Rise, EBW Market Says

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