European natural gas futures moved higher again as an exchange of threats between the United States and Iran over the Strait of Hormuz intensified tensions in an already volatile market.
Benchmark contracts rose by more than 5% at the start of trading, fully reversing losses from the previous session. On Saturday, U.S. President Donald Trump gave Iran two days to restore shipping through Hormuz, warning that failure to comply would result in strikes on power plants. Tehran responded that it would target critical infrastructure across the Middle East if those threats were carried out.
The conflict has entered its fourth week with no signs of de-escalation. Shipping through Hormuz has effectively come to a halt this month, removing nearly 20% of global liquefied natural gas supplies. Qatar’s largest LNG facility has been shut down, with about 17% of its capacity damaged. Authorities estimate that a return to prewar levels could take up to five years.
Gas prices in Europe and Asia could “continue to rise” as a deeper-than-expected contraction in global LNG supply takes hold, according to a note by analysts at Goldman Sachs Group Inc., led by Samantha Dart. In their view, “large-scale attacks on energy infrastructure in the Middle East last week suggest that supply disruptions will last longer than previously assumed,” a shift that has already prompted upward revisions to price forecasts.
Traders are also closely watching the pace of gas injections in Europe, where the region will require substantial LNG volumes this year to rebuild depleted inventories. European Energy Commissioner Dan Jorgensen has urged EU countries to begin refilling storage early to avoid competition for supplies in the summer. He also recommended lowering the storage target to 80% and making full use of the flexibility mechanisms предусмотренные EU legislation.
Dutch front-month futures—the key benchmark for the European market—rose 4.7% to €62.02 per megawatt-hour at 8:33 AM in Amsterdam.