Middle East Uncertainty Fuels European Gas Price Surge

European natural gas prices rose sharply on Friday to €68.6/MWh, their highest level since January 2023, as supply risks increased due to uncertainty over a Middle East peace deal.

The price jump was triggered by reports that President Trump was not interested in returning to the terms of a June deal with Iran, reversing losses from earlier in the week.

These losses had been driven by progress in talks between Pakistan and Iran to end the conflict, as well as an agreement between Tehran and Oman on control and revenues tied to the Strait of Hormuz.

The near-closure of the Strait has continued to disrupt LNG supplies from Qatar, while extreme summer heat-driven cooling demand diverted supplies from storage.