European Gas Prices Soar Amid Middle East Diplomacy
European natural gas prices rose above €66 per megawatt-hour on Thursday after a two-day decline. This increase came as investors assessed diplomatic progress in the Middle East, specifically agreements between Iran and Oman for sharing control and revenues from the Strait of Hormuz.
Tehran emphasized that these deals do not imply an immediate reopening of the waterway, warning that it will remain closed if the US does not accept the proposal's terms. This uncertainty has raised concerns over when energy flows can return to normal, particularly with continued restrictions in the strait disrupting LNG flows from Qatar.
Another contributing factor is extreme summer heat, which has boosted demand for gas-fired power generation and left European gas storage at just 63% full, the lowest level since 2009. As a result, prices remain vulnerable to further volatility, especially if supply disruptions persist into the heating season.