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EMEA Natural Gas Update: UK Futures Soar Nearly 8% After Two Tankers Attacked Near Hormuz

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European natural gas futures soared higher on Tuesday after two oil tankers were struck by projectiles in the Strait of Hormuz, casting a further shadow over Europe's attempts to increase its gas reserves before winter.

Front-month Dutch TTF contracts rose 3.07% to 71.950 euros ($83.44) per megawatt hour, while UK NBP futures rose 7.52% to 177.210 British pence ($2.40) per therm.

Two oil tankers were struck by projectiles on Tuesday off the coast of Oman, according to the UK's Maritime Trade Organization and maritime security consultant, Marisks. While no casualties were reported, the UKMTO advised vessels in the area to exercise caution.

This comes after the US and Iran exchanged strikes earlier this week, for the first time in a month, marking a fresh escalation in the on-off war between the foes.

Traffic through the Strait of Hormuz amounted to 11 transits on Monday, according to ShipFinder.

Daniel Hynes, senior commodity strategist at ANZ, said the latest attacks had dashed hopes of a resumption in Middle Eastern gas flows, with "barely any LNG tankers making the risky journey" since a Qatari LNG carrier was attacked in early July.

According to Hynes, the "only saviour" for European buyers ahead of the upcoming winter is weaker demand from leading Asian buyers, while noting that China's LNG imports were set to drop 18% year-over-year this month, citing ship tracking data.

However, India's LNG imports have surged in August by over 40% year-over-year, reaching their highest levels since 2020, as reported by. This is expected to weigh on Europe's ability to refill inventories ahead of winter.

European gas inventories remained below seasonal averages, at just 69.05% of capacity, compared to 77.38% 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 81.9%, according to the Swiss Federal Office of Energy.

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