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EMEA Natural Gas Update: Futures Slide Over 5% After Trump Unveils Deal With Iran

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European natural gas futures fell sharply on Monday, reaching their lowest levels in five weeks after the US and Iran agreed on a draft agreement to end hostilities in the Middle East and reopen the Strait of Hormuz.

The Dutch TTF front-month contract dropped 4.89% to 44.485 euros ($51.60) per megawatt-hour, while the UK NBP front-month contract was down 5.27% to 106.01 British pence ($1.42) per therm.

In a Truth Social post on Sunday, US President Donald Trump said that the deal with Iran was "now complete," adding that the Strait of Hormuz would fully reopen, with no tolls being charged, and that the US naval blockade in the region would be lifted, paving the way for uninterrupted passage of commercial vessels through the strategically important waterway.

Trump said that oil will once again begin to flow once mine removal operations have concluded in the Strait.

In another post, regarding the timing of the reopening, Trump said "With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!," suggesting mine removal may begin on Friday with shipping to resume later.

The Strait of Hormuz, which accounted for one-fifth of global LNG flows, remains shut for the 16th week running, with just two vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor, as vessels still await clarity regarding transit via the Strait.

According to Daniel Hynes, a senior commodity strategist at ANZ, European gas futures continued to ease amid easing concerns regarding the refilling of storage facilities, with LNG supplies set to recover once the Strait opens.

European natural gas inventories stand at 44.34% of capacity, compared to 53.02% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventories were significantly below the five-year average for this period, at 58.7%, according to the Swiss Federal Office of Energy.

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