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EMEA Natural Gas Update: Futures Rise Despite Iran's Assurances on Hormuz Shipping

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European natural gas futures were up on Thursday, despite Iran's statement saying that the Strait of Hormuz was open for all vessels, provided they cooperate with the Iranian Navy.

The front-month Dutch TTF contract was up 1.41% at 47.58 euros ($55.63) per megawatt-hour, while the UK NBP front-month contract was up 1.31% to 116.54 British pence ($1.58) per therm.

Iran's foreign minister, Seyed Abbas Araghchi told Iran's PressTV: "As far as we are concerned, the Strait of Hormuz is open for all commercial vessels, but they need to cooperate with our navy forces,".

He made the comments on the sidelines of the BRICS Foreign Ministers' Meeting in New Delhi on Thursday.

Yet, the strategically crucial Strait, which handled one-fifth of global LNG flows, remained effectively closed for the 11th week running, with just 17 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

This comes at a critical juncture for European gas markets, with the region's inventories significantly depleted, holding just 35.72% of capacity, compared to 43.1% during the same period last year, according to Gas Infrastructure Europe.

Inventory levels were also significantly below the five-year average of 48.4% for this time of year, according to data from the Swiss Federal Office of Energy.

Cyril Widdershoven, a geopolitical strategist at Blue Water Strategy, warned that the markets were still pricing this conflict as "temporary," while maritime transport prices were pointing to long-term impact, with war-risk premiums, rerouting costs, insurance, inflation, and more, becoming "structurally embedded into the global energy system."

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