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EMEA Natural Gas Update: Futures Slide as Iran, Oman Make Progress on Hormuz Transit Framework

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European natural gas futures slid on Wednesday after Iran and Oman made progress on a framework to allow temporary transit along the Strait of Hormuz.

Front-month Dutch TTF futures dropped 3.32% to 64.375 euros ($75.15) per megawatt-hour, while UK NBP futures dropped 3.31% to 158.700 British pence ($2.16) per therm.

According to a joint statement issued Tuesday, Omani Foreign Minister Sayyid Badr Albusaidi and his Iranian counterpart, Seyyed Abbas Araghchi, discussed a "phased framework" which would establish a temporary joint shipping corridor through the Strait of Hormuz and launch a coordinated effort to clear mines from the waterway.

On Tuesday, in a post on X, Albusaidi said that the two countries would soon announce the "temporary corridor," helping restore safe navigation through the strait, while a more "permanent solution will follow in due course."

However, Iranian officials have maintained that the strait will not fully reopen unless Washington meets Tehran's demands, including lifting the naval blockade, removing energy sanctions on the country and unfreezing its assets held abroad, according to an Al Jazeera report.

Meanwhile, traffic along the strategically crucial Strait of Hormuz, which accounted for one-fifth of global LNG flows, held steady, with 16 vessels transiting on Tuesday, according to ShipFinder.

ANZ senior commodity strategist Daniel Hynes noted that, at the current pace of injections, European gas storage facilities could enter winter at just 75% of capacity, as the region faced growing competition from Asian buyers for limited supplies, amid persistent disruptions to Middle Eastern flows.

European gas inventories stood at 63.28% of capacity, compared to 75.99% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventories were also significantly below the five-year average for the period, at 80.5%, according to the Swiss Federal Office of Energy.

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