-- European natural gas futures edged lower in after-hours trading on Monday following reports that Iran has proposed reopening the Strait of Hormuz in exchange for the US lifting its blockade.
The front-month Dutch TTF gas contract fell 0.92% to 44.45 euros ($52.14) per megawatt hour, while the UK NBP benchmark declined 1.48% to 110.25 British pence ($1.49) per therm.
Media reports said Iran has offered to end its restrictions on transit through the Strait if Washington lifts economic and military pressure and agrees to halt hostilities. The proposal would reportedly defer negotiations over Iran's nuclear program.
The development follows the collapse of a planned second round of US-Iran peace talks in Pakistan over the weekend, which failed to take place as hoped.
The Strait of Hormuz, a critical artery accounting for roughly one-fifth of global liquefied natural gas flows, has effectively remained closed for nine consecutive weeks. However, vessel activity showed increased traffic, with 19 ships transiting the passage in the past 24 hours, according to the Hormuz Strait Monitor.
Supply concerns have been compounded by infrastructure damage in Qatar. On Friday, the International Energy Agency warned that disruptions could delay a major LNG expansion project by at least two years, potentially removing 120 billion cubic meters of supply from the market between 2026 and 2030.
"While new liquefaction projects in other regions are expected to offset these losses over time, the impact will prolong tight markets through 2026 and 2027," it said.
At the same time, European gas storage levels remain under pressure. Inventories stood at 31.47% of capacity, compared with 38.14% during the same period last year, according to Gas Infrastructure Europe.
Timera Energy said low storage levels in April mean Europe will need injection rates similar to last summer to meet even a reduced 80% storage target. While slower injections are currently helping stabilize global prices, the firm warned that a sustained increase may be necessary in the coming months.
Absent a swift resolution to Middle East tensions, Timera said Europe may need to aggressively bid for LNG cargoes to secure supply, potentially driving prices higher and diverting shipments away from Asian buyers.