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EMEA Natural Gas Update: Futures Soar Over 5% as US-Iran Military Conflict Escalates

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European natural gas futures rallied on Friday as the US and Iran continued military action in the Middle East.

The front-month Dutch TTF contract rose 5.11% to 57.585 euros ($65.81) per megawatt-hour. The front-month UK NBP contract was up 5.43% to 139.140 British pence ($1.87) per therm. Both Dutch TTF and UK Gas were set to end the week up by 18.19% and 18.71%, respectively, according to TradingEconomics.

On Friday, in a post on X, US Central Command said that it had completed its "latest major wave of strikes against Iran," hitting several Iranian military targets, including coastal surveillance, air defense sites, military logistics and maritime capabilities.

This marked the sixth consecutive day of strikes against Tehran, aimed at diminishing the country's ability to attack commercial shipping along the Strait of Hormuz.

Iran's Islamic Revolutionary Guard Corps has since claimed a 13th wave of retaliatory attacks against US bases located in the Gulf. The group has said that it has struck bases across Bahrain, Jordan, Syria, Qatar, Oman and Kuwait, according to a report by Al Jazeera.

Meanwhile, commercial ships continued to traverse the strategically crucial Strait of Hormuz, with 16 vessels passing through on Thursday, according to ShipFinder.

Daniel Hynes, a senior commodity strategist at ANZ, warned that this persistent disruption in flows along the Hormuz will "hamper Europe's efforts to refill storage facilities," as the region competes with Asian buyers for limited cargoes.

European gas inventories were comparatively low at 53% of capacity, compared to 63.61% 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 68.3%, according to the Swiss Federal Office of Energy.

The unprecedented recent heatwave across Europe has given way to thunderstorms, leading to torrential rainfall and flooding across major cities, according to a report by The Guardian.

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