European Gas Prices Rise on Persian Gulf Supply Fears
European natural gas prices climbed on Monday due to growing concerns over liquefied natural gas (LNG) supply disruptions from the Persian Gulf. The rise came amid heightened security risks around the Strait of Hormuz, a critical energy chokepoint. The November contract at the Dutch-based TTF, Europe's benchmark for natural gas pricing, settled at €74.76 per megawatt-hour on Friday. Prices then rose 0.4% to €75.07 per megawatt-hour as worries over LNG shipments intensified.
Recent attacks on vessels in the Strait of Hormuz have raised alarms over the reliability of energy shipments from the region. The United Kingdom Maritime Trade Operations (UKMTO) reported that an oil tanker was struck by an unidentified projectile in the strait. Iranian media also noted explosions near Qeshm Island, further escalating tensions. Iran’s Deputy Foreign Minister for Legal and International Affairs, Kazem Gharibabadi, mentioned that Tehran was reviewing a message from the United States regarding a seven-day plan to reopen the strait.
Meanwhile, natural gas storage levels in European Union countries stood at 72.4% full, below the five-year seasonal average of 87%. As Europe aims to replenish gas stocks ahead of winter, the lagging inventories have raised concerns about potential supply disruptions tightening the market. Analysts warned that a colder-than-expected start to the heating season could increase gas demand, putting additional upward pressure on prices.