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EMEA Natural Gas Update: Futures Rise Amid Lingering US-Iran Conflict Uncertainties

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European natural gas futures rose on Monday, hovering near their highest level in over three years, as uncertainties continued to linger over the Strait of Hormuz.

Front-month Dutch TTF futures rose 1.80% to 73.250 euros ($85.07) per megawatt-hour, while UK NBP futures gained 1.64% to 181.750 British pence ($2.46) per therm.

On Monday, Iran's top security official, Mohsen Rezaei, said that in the coming days the country would declare a restricted zone near the Strait of Hormuz, while unveiling the new shipping route for commercial vessels to take, as agreed with Oman in recent weeks, according to an Al Jazeera report.

However, in an interview with ABC News on Sunday, US Energy Secretary Chris Wright said that there might not be a nuclear deal with Iran, and that the US might instead pivot to launching strikes against any attempts by Tehran to build nuclear infrastructure.

Traffic along the strategically crucial strait, which accounted for one-fifth of global LNG flows, inched higher on Sunday, with 21 vessels transiting, according to ShipFinder.

Meanwhile, signs of a potential recovery in Qatari LNG exports were beginning to emerge. Qatar was bringing empty LNG tankers back into the Arabian Gulf after weeks of chartering out vessels idled by the disruption, a move seen as laying the groundwork for a resumption of shipments, Bloomberg reported, citing ship-tracking data.

Daniel Hynes, a senior commodity strategist at ANZ, noted that Qatar hadn't sent even a single "LNG tanker through the key waterway since one of its tankers was hit by a missile in July," making this a significant new development for the markets.

This comes with Europe just weeks away from the upcoming heating season, with inventories significantly below historic averages, at 66.59% of capacity, compared to 79.20% 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 83.10%, according to the Swiss Federal Office of Energy.

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