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EMEA Natural Gas Update: Futures Slide Nearly 6% After Trump Expresses Optimism on Iran Peace Deal

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European natural gas futures witnessed a steep decline on Monday, reaching their lowest level in weeks amid signs of progress on a US-Iran peace deal, with US President Donald Trump once again expressing optimism.

The Dutch TTF front-month contract fell 5.61% to 45.950 euros ($53.53) per megawatt hour, while UK markets were closed on Monday due to the Spring Bank holiday.

In a Truth Social post on Monday, Trump said that the deal was progressing "nicely".

US Secretary of State Marco Rubio echoed similar sentiments earlier in the day, noting that there was a "pretty solid" deal on the table and that the US was going to give diplomacy "every chance to succeed," before exploring the "alternatives," while speaking to reporters in New Delhi.

Meanwhile, Iran's Foreign Ministry Spokesperson Esmaeil Baqaei on Monday, said that while conclusions had been reached on many topics that were under discussion with the US, the signing of an agreement was not "imminent."

As the uncertainty continues, the Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained effectively closed for the 13th week running, despite seeing a major uptick in traffic, with 33 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

This, however, is still significantly below the typical daily average of 138 vessels that sailed through the Strait before the conflict.

According to Daniel Hynes, a senior commodity strategist at ANZ, recent developments have led to a pullback in European gas prices, since the region's "restocking requirements are less critical than those in Asia."

This was despite inventory levels looking low, at just 37.83% of capacity, compared to 45.69% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventory levels were also significantly below the five-year average for this period, at 51.9%, according to data from the Swiss Federal Office of Energy.

At the same time, Europe is forecast to experience a "record-breaking" late-May heatwave, with temperatures expected to soar between 12 and 16 degrees Celsius above long-term climatological norms, according to Severe Weather EU.

Such conditions are expected to result in increased air conditioner usage, pushing up electricity demand and gas consumption with it, with Portugal, Spain and France already seeing daytime highs of 35 to 38 degrees Celsius.

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Worst of Energy Crisis Yet to Come if Hormuz Closure Persists, IEEFA Says

The Institute for Energy Economics and Financial Analysis has added its voice to a chorus of analysts who warn that bigger strains on global energy may be just around the corner without an imminent reopening of the Strait of Hormuz, according to a commentary on Monday.It said the safety net that has averted a much sharper rise in oil prices is derived from some demand destruction, use of oil reserves, efforts to raise production in places independent of the Hormuz Strait plus a steadfast sense that the crisis will not be long-lasting.But as the crisis drags on, the supply and demand balance, already skewed by the Hormuz Strait closure shutting off 20% of the world's oil and gas supply, is likely to become more lop-sided with impacts for governments, industry and consumers.IEEFA notes that oil reserves in many countries are running low almost three months into the crisis while the US is about to enter peak "driving season" when driven road miles increase sharply and gasoline demand rises consequently.Illustrating what some sense as a disconnect between the gravity of the current energy crisis and what they perceive as a subdued market reaction, the report notes that on paper, the current crisis is more serious than the oil crisis of the 1970s, but the sense of urgency is a lesser one.It also notes that the rise in LNG prices this year is "a blip" compared to the gas market reaction to Russia's invasion of Ukraine in 2022 and gas price movements have been timid in comparison with those of oil, up 72% since January.IEEFA says that oil prices have not yet touched the $120 level reached in 2022, let alone the record of $147 in 2008, despite forecasts by some analysts that prices will hit $200."Oil traders look to be acting in the hope the conflict will be over soon and normal oil shipments will resume," it said.Part of this may be explained by the fact that prior to the Feb. 28 US strikes on Iran, the oil market was instead grappling with surplus supply, with China having added about 1.1 million barrels a day to its stockpiles over 2025.With their oil under sanctions, Iran and Russia were hunting for buyers for their crude production, IEEFA said.Incremental supply increases have provided some buffering, with US sanctions on Russian oil temporarily lifted, but the latter has been contending with repeated Ukrainian strikes on its energy facilities, slowing export flows.Russia had pounded Ukrainian energy infrastructure including electricity supplies since the outset of its invasion.Argentina, Brazil and Guyana in the Americas have also raised their production. At the same time, global demand is falling, albeit somewhat artificially as countries in Asia, the region most exposed to the energy crisis, seek to conserve energy to reduce import needs.China has begun tapping its vast reserves of 1.4 billion barrels, IEEFA said, while reducing imports and with consumption of 17 million barrels a day, those reserves could shrink rapidly.Globally, stockpiles have fallen to their lowest level in eight years, the commentary notes.A further tightening of supplies could be evident as early as June, according to JP Morgan Chase, IEEFA said, with low reserves beginning to put "real strain" on economies by September.

Oil & Energy

Market Chatter: Oil, LNG Tanker Traffic Through Hormuz Picks Up as Operators Turn to Dark Transits

As the US and Iran make apparent progress on a peace deal, a handful of oil and LNG tankers have been quietly transiting via the Strait of Hormuz, according to a Reuters report, citing ship tracking data.Three LNG tankers made the risky crossing journey in recent days, heading to Pakistan, China, and India, along with a supertanker stocked with Iraqi crude, heading towards China, which was reportedly stuck in the Persian Gulf for nearly three months, due to the conflict.Pakistan, India and China were among a small group of nations deemed "friendly" earlier in the conflict and permitted to sail through the Strait.Other prominent vessels to have made the transit recently include the Bahamas-flagged Fuwairit, owned by Japan's Mitsui OSK Lines, followed by Al Rayyan, which is owned by QatarEnergy, and is expected to arrive in China by late June.According to a Bloomberg report, both Qatar and Abu Dhabi increased efforts to move cargoes through Hormuz using alternative operating practices, including the use of "dark transits", which involve vessels temporarily switching off their transponders to avoid detection.The Abu Dhabi National Oil Company, or ADNOC, has increasingly relied on vessels controlled by Navig8 and joint venture partner Wanhua Chemical Group to move crude, refined products and LNG cargoes out of the Gulf.ADNOC did not immediately respond to' request for a comment on this story.Transit through the Strait has witnessed an uptick, with 33 vessels having travelled through over the past 24 hours, according to the Hormuz Strait Monitor.While this is still significantly below the typical daily average of 138 vessels during normal times, it marks an uptick from the low-to mid-single-digit traffic figures, which had become the norm in recent weeks.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Oil & Energy

Market Chatter: Indian Fuel Retailers Raise Prices for the Fourth Time This Month to Stem Losses

India's state-owned fuel retailers hiked the prices of petrol and diesel on Monday, marking the fourth such increase in May and one aimed at recouping losses incurred due to high wholesale prices, according to a Reuters report citing dealers.The retail prices of petrol and diesel rose by 2.61 rupees ($0.027) and 2.71 rupees, respectively, across outlets operated by state fuel retailers, which account for 90% of the network.Since price increases began on May 15, the prices of petrol and diesel have risen by 8.6% and 7.8%, respectively, as rising import prices linked to supply disruption, weigh on the world's third-largest oil importer and consumer.In a statement released on Saturday, the Indian Oil Corporation, the country's largest fuel retailer, said that sales of petrol and diesel had increased by 14% and 18% so far this month over and above this time last year, despite the higher prices.Leading Indian state-owned fuel retailers did not immediately respond to' request for comment on this story.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)