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Iran President's Remarks Dim Hopes for Hormuz Strait Reopening, European Gas Futures Jump Over 4%
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European natural gas prices rose on Thursday after Iranian President Masoud Pezeshkian outlined conditions for resuming talks with the US, dashing hopes for a quick normalization of energy flows through the Strait of Hormuz. Benchmark Dutch front-month futures rose as much as 4.2% before settling at 3.44% higher, to €74.49 per megawatt-hour. Speaking at the UN General Assembly, Pezeshkian insisted that Iran would not allow freedom of navigation through the strait as long as US sanctions and a blockade remain. This undercut earlier signs of diplomatic progress. While some oil shipments have resumed, liquefied natural gas (LNG) traffic remains low due to its reliance on specialized tankers and vulnerability to security risks. European gas storage is just above 70%, well below the seasonal norm of 86%, raising concerns about competition with Asia for limited global LNG supplies. Additionally, maintenance work has reduced Norwegian pipeline flows to Europe. The EU Gas Coordination Group is scheduled to meet Thursday to discuss the supply situation.
Source report
Benchmark futures surged up to 4.2% on Thursday, as geopolitical tensions in the Middle East continued to weigh on energy markets.
According to Zhitong Finance, European natural gas prices rose after Iran's president emphasized significant divisions between Iran and the United States amid ongoing conflict, dampening hopes for a near-term normalization of energy flows through the Strait of Hormuz.
Market Movements
- The Dutch month-ahead futures contract — the European benchmark for natural gas — rose 3.44% to €74.49 per megawatt-hour as of press time.
- Prices had earlier climbed as much as 4.2% during the trading session.
Geopolitical Context
Market trends have been volatile this week, as traders weigh geopolitical developments against Europe's efforts to rebuild depleted natural gas reserves ahead of winter.
Iranian President Masoud Pezeshkian on Wednesday outlined a series of conditions that must be met before any substantive negotiations with Washington could resume. He insisted that Tehran would not allow freedom of navigation through the Strait of Hormuz as long as sanctions and the U.S. blockade remain in place.
His address at the United Nations General Assembly in New York undermined signs of preliminary diplomatic progress that had emerged earlier this week.
LNG and Supply Concerns
While there are indications that more oil cargoes are passing through the Strait of Hormuz, liquefied natural gas (LNG) flows remain subdued. LNG relies on specialized tankers and is more vulnerable to security risks in the strait.
The persistent shortage of Middle Eastern LNG means Europe will face fiercer competition from Asia for limited global supplies as traders work to replenish inventories.
Storage and Infrastructure
- European gas storage levels currently stand at just over 70%, well below the seasonal norm of 86%.
- Adding further tightness to the market, pipeline gas flows from Norway to continental Europe have declined due to maintenance at gas facilities.
- The EU Gas Coordination Group is scheduled to meet on Thursday to discuss the supply situation.
Source
智通财经Neutral / independent
Part of this Story
Iran president sets conditions for Hormuz talks, European gas futures jump 4.2%