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EMEA Natural Gas Update: Futures Rise on Risk Premiums as Peace Hopes Fade

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European natural gas futures rose in after-hours trade on Tuesday as hopes for a negotiated end to the situation in the Middle East faded and risk premiums rose.

Front-month Dutch TTF futures rose 3.778% to 64.090 euros ($74.23) per megawatt-hour, while U.K. NBP futures gained 3.770% to 158.290 British pence ($2.14) per therm.

European natural gas prices extended a sustained rally on Tuesday as military escalation in the Persian Gulf and the slowing or stopping of tanker transit through the Strait of Hormuz intensified concerns over a severe winter supply crunch, Trading Economics said.

Citing Iranian officials, Reuters reported on Tuesday that Tehran has shifted to a fully offensive military posture after diplomatic efforts to establish a permanent peace deal collapsed and Washington explicitly ruled out extending a temporary ceasefire framework.

The escalation follows threats from US President Donald Trump over the weekend to impose a strict naval blockade or take military action in response to interference with regional transit.

Energy desks are reintroducing a heavy risk premium as the physical shipping freeze through the Strait of Hormuz worsens. Commercial commodity traffic through the critical chokepoint came to a standstill over the weekend, stranding Qatari liquefied natural gas tankers and delaying vital spot deliveries bound for European import terminals, Investing.com said.

Mind Energy said temperatures in Europe have fallen from last week, curbing demand, but the TTF front-month contract is still approaching the five-month highs recorded last month.

European utilities are also facing fierce competition from Asian buyers, who are actively bidding for spot LNG cargoes to secure winter fuel buffers.

Gas Infrastructure Europe put EU inventories at 61.11% of capacity, versus 73.63% a year earlier, while the Swiss Federal Office of Energy said inventories were significantly below the five-year average of 78.1%.

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