US strikes on Iran lift European gas prices

Market: Natural gas
08/07/26

European gas prices rose in early Wednesday trading after the US resumed air strikes on Iran and President Donald Trump said the ceasefire "is over", dimming hopes for a return to normal vessel movements through the strait of Hormuz.

The TTF front-month contract surged to €49.050/MWh at 08:18 GMT, when European traders entered the market, and stood at €48.85/MWh at the time of publication, up by 4.5pc from Tuesday's close. The contract last settled higher at €49.75/MWh on 11 June, before the US and Iran agreed a ceasefire.

Prices climbed after Trump said the ceasefire was over following overnight exchanges in the Mideast Gulf — the first since 27-28 June. Trump said it was a "waste of time" dealing with Iran, but left the door open for further negotiations.

The US resumed strikes on Iranian targets on Tuesday evening, following Iranian attacks on vessels travelling through southern stretches of the strait, including an LNG carrier and a very large crude carrier. The attacks had pushed up the TTF front-month price by 6pc at Tuesday's close. The UK Maritime Trade Organisation raised its Mideast Gulf threat level to "severe" after the attacks. Hormuz traffic had been holding at around 30pc of pre-war levels in the week before the latest hostilities.

A fifth of global LNG supply used to transit Hormuz. This week's exchanges make a return to pre-war flows a more distant prospect and extend the tight global gas outlook. Some traders had expected the war to end before peak Asian demand in August — when hot weather drives LNG demand for cooling — which is likely to pull in more Atlantic basin cargoes from Europe.

European gas injections have been sluggish in recent weeks. EU storage was at 50.6pc of capacity on Tuesday morning, holding 572.4TWh, GIE transparency platform data show. This was 209TWh below the five-year average for the date and the lowest since 2022.

Depleted inventories could lift prices this winter, when supply risks increase, market participants have told Argus. TTF August and September premiums to the following winter widened during Wednesday trading — August was at a €1.55/MWh premium at the time of publication, up from €1.305/MWh at Tuesday's close. September was at a €1.695/MWh premium, up from €1.54/MWh.

By Alejandro Moreano

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US strikes on Iran lift European gas prices

Related news posts

Iran says Hormuz shut after fresh US attacks

Iran says Hormuz shut after fresh US attacks

US cuts habitat protections for at-risk species

US cuts habitat protections for at-risk species

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Chevron, Australia's Alinta sign five-year gas deal

Chevron, Australia's Alinta sign five-year gas deal

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Australia's east coast to have surplus gas in 4Q: ACCC

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