European natural gas futures edged higher on Friday after the US doubled down on fresh economic sanctions against Iran, while Tehran called for an end to the conflict.
Front-month Dutch TTF futures rose 0.84% to 65.845 euros ($76.92) per megawatt-hour, while UK NBP futures gained 0.85% to 162.600 British pence ($2.22) per therm.
On Thursday, US Treasury Secretary Scott Bessent reaffirmed Washington's economic campaign against Tehran, describing it as the "greatest coordinated economic isolation in the history of the world" during an interview with CNBC.
Meanwhile, Iran's President Masoud Pezeshkian said on Friday that it was time to end the months-long conflict, as Tehran was now in a position of power over Washington.
"It is better that we bring the war to an end now as we are in a position of power and dignity," Pezeshkian said, while speaking at the 31st General Assembly of the Islamic Association of the Iranian Medical Community, hinting at the regime's willingness to de-escalate the situation.
Traffic through the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows before the war, stood at 18 total transits on Thursday, according to ShipFinder.
Daniel Hynes, senior commodity strategist at ANZ, noted that European gas prices surged to a five-month high as prolonged disruptions to Middle East flows hampered the region's ability to refill storage, which remais well below historical averages.
European gas inventories stood at 61.82% of capacity, compared to 74.53% 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 79.0%, according to the Swiss Federal Office of Energy.
However, the European Commission played down concerns over low inventories ahead of winter, with spokesperson Eva Hrncirova saying there was "no immediate concern for the security of gas supply," while noting that the bloc was targeting storage levels of 80% of capacity rather than 100%, as reported by.
Weather forecasts offered some reassurance for the region, pointing towards a milder-than-normal winter, which would lessen demand for heating gas, according to a report by Severe-Weather EU.