Hormuz Tensions and Low Storage Drive European Gas Price Surge

European natural gas prices climbed on Monday, driven by growing concerns over supply disruptions and low storage levels. The November contract at the Dutch TTF, Europe's benchmark for natural gas pricing, settled at €74.76 per megawatt-hour on Friday and rose 0.4% to €75.07 per megawatt-hour on Monday.

The price surge was fueled by heightened security risks around the Strait of Hormuz, a vital energy chokepoint for liquefied natural gas (LNG) shipments from the Persian Gulf. Recent attacks on vessels in the strait have raised alarms about the reliability of gas supplies from the region. The UK Maritime Trade Operations reported an oil tanker strike, while Iranian media noted explosions near Qeshm Island.

Diplomatic tensions added to the uncertainty, with Iran reviewing a U.S. proposal to reopen the Strait of Hormuz. Meanwhile, Europe's natural gas storage levels remained critically low, at 72.4% full, well below the five-year seasonal average of 87%. Analysts warn that a colder-than-expected winter could further tighten the market and push prices higher.