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EMEA Natural Gas Update: Futures Slide After Rubio Says Iran is Begging for a Deal

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European natural gas futures fell on Thursday following statements by US Secretary of State Marco Rubio, signaling a potential diplomatic solution in the war with Iran.

The front-month Dutch TTF contract dropped 1.25% to 61.755 euros ($70.28) per megawatt-hour, while the front-month UK NBP contract dropped 1.49% to 149.180 British pence ($2.01) per therm.

This was despite a roughly 6% rise in Brent crude futures which returned to close to $100 per barrel on Wednesday.

Speaking on the sidelines of the ASEAN conference in Manila on Thursday, Rubio said Iran was "begging" Washington, both directly and through intermediaries, to negotiate a deal.

However, he argued that Tehran was not yet serious, accusing its leaders of repeatedly breaking agreements or seeking to revise their terms. Rubio warned that Iran would continue to "pay a price," with the costs mounting each night until it was prepared to reach an agreement it would honor.

This comes following US President Donald Trump's latest warning that US forces would now strike Iran's power plants and bridges each time Tehran targets commercial traffic in the Strait of Hormuz.

Traffic through the strait, which accounted for one-fifth of global LNG flows, held steady with 15 transits on Wednesday, despite mounting tensions, according to data from ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, warned that Europe was "running out of time to replenish its gas reserves ahead of next winter," as competition for LNG cargoes intensifies, especially from Asian buyers amid mounting global supply constraints.

Hynes also noted that the hopes of Qatari supplies resuming had begun to fade, with the country now offering sub-charters for its LNG tankers near the US coast, which he said was an indication that it was in no hurry to scale its output back up to normal.

European gas inventories stand at just 54.38% of capacity, compared to 65.36% 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 70%, according to data from the Swiss Federal Office of Energy.

This comes at a time when heatwaves and record temperatures continue to haunt southwestern Europe, with Spain bracing for 45 to 47 degrees Celsius this week, with hot air arriving from the Sahara Desert, according to a report by Severe-Weather EU.

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