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EMEA Natural Gas Update: Futures Slide After Iran, Oman Agree on Hormuz Framework

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European natural gas futures reversed gains from earlier in the day after Iran said it had agreed to a framework with Oman to reopen the Strait of Hormuz.

The front-month Dutch TTF contract dropped 2.16% to 54.580 euros ($63.17) per megawatt-hour, while the front-month UK NBP contract declined 2.57% to 133.390 British pence ($1.79) per therm.

Both Dutch TTF and UK Gas were sent to end the week down by 7.89% and 7.86%, respectively, according to Trading Economics.

Hassan Ghashghavi, the spokesman for Iran's Parliament National Security and Foreign Policy Committee, said that Tehran and Muscat had reached a consensus on the Strait of Hormuz, pending final approval from higher official levels of both countries, according to a report by Iran's Mehr News Agency.

"We are waiting for both the final agreement and a joint statement that will clarify many of the general guidelines," Ghashghavi said, hinting at a potential end to disruptions along the Hormuz.

Traffic through the strait, which accounted for one-fifth of global LNG flows, slipped to just 10 total transits on Thursday, according to ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, noted that the proposed deal still posed challenges for Oman's resumption of shipments through the Strait.

This comes amid low gas inventories across Europe, at just 58.10%, compared to 70.30% 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 74.6%, according to the Swiss Federal Office of Energy.

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