(Bloomberg) — European natural gas futures traded in a narrow range as traders weighed Iran’s comments on the vital Strait of Hormuz, assessing the outlook for energy shipments from the Middle East.
Iran’s new supreme leader said the key passage should remain shut, while threatening to open other fronts in the war if the US and Israel persist with their attacks. Benchmark futures briefly jumped as much as 7.7% earlier on Thursday.
Later, AFP reported that the country said it was not laying mines in the waterway and had allowed some ships to transit. That saw both oil and gas pare gains.
Read Also: Iran Has Likely Begun Laying Mines in Hormuz, UK Minister Says
The war in the Middle East shows no sign of abating, and traders are struggling to take new positions amid a flurry of news headlines. The conflict has effectively halted traffic through the Strait of Hormuz and shut down production at the world’s biggest LNG plant in Qatar, cutting off around a fifth of global supply.
While the US said its Navy could start escorting tankers through the crucial waterway, Energy Secretary Chris Wright said military escorts were unlikely to begin until the end of the month.
Meanwhile, Morgan Stanley raised its forecast for European gas prices for the rest of the year, as the region needs to attract large amounts of liquefied natural gas over the summer to refill its depleted inventories. The bank assumes at least a month-long outage to LNG production in Qatar, which will fully remove the global fuel surplus that had been expected for 2026.
“Volatility remains the key theme as conflict in the Middle East continues,” shipbroker Fearnleys A/S said in a weekly note. “Where the LNG and the LNG shipping markets go in the coming days is still uncertain.”
Asian LNG buyers are preparing to purchase more supply for the next two months as the market tightens. While Europe’s LNG imports remain steady for now, several vessels have already diverted to Asia and competition could intensify in the coming months if disruptions last.
“If it lasts longer — and no one can really predict that today, especially as we continue to see nightly attacks on energy facilities — then the situation will become more critical,” RWE AG Chief Executive Officer Markus Krebber said Thursday. “In that case, Europe in particular will have to focus on how to organize the injection of gas into storage facilities this summer so that they are full again before next winter.”
Dutch front-month futures, Europe’s gas benchmark, traded 1.6% higher at €50.78 a megawatt-hour by 5:29 p.m. in Amsterdam.
–With assistance from Eva Brendel.
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