Key Moments
- Dutch TTF front-month natural gas futures were up 0.9% at 44.83 euros per megawatt hour by 06:37 ET (10:37 GMT).
- Tensions around the Strait of Hormuz and attacks on Persian Gulf production facilities have reduced European gas supply flows.
- Further price support could emerge from lower wind generation in Europe and an LNG facility strike in Australia.
TTF Benchmark Gains Amid Geopolitical Tensions
European natural gas prices moved higher on Friday as market participants weighed the impact of ongoing disruptions in the Strait of Hormuz and the lack of progress in peace efforts between the U.S. and Iran.
Data from the Intercontinental Exchange showed that by 06:37 ET (10:37 GMT), the Dutch front-month contract at the TTF hub had increased by 0.9% to 44.83 euros per megawatt hour.
| Contract | Hub | Time | Price (EUR/MWh) | Change |
|---|---|---|---|---|
| Front-month | TTF (Dutch) | 06:37 ET (10:37 GMT) | 44.83 | +0.9% |
Ceasefires Announced but Risks Remain Elevated
President Donald Trump said on Thursday that a ceasefire between Israel and Lebanon would be extended for three weeks following a meeting with diplomats from both countries.
However, representatives from Hezbollah, the militant group engaged in fighting in Lebanon, did not attend the discussions, raising questions over how sustainable the truce will be. Firing between Israel and Hezbollah was also reported in the hours preceding Trump’s statement.
Earlier in the week, Trump also announced an indefinite ceasefire between the U.S. and Iran, while keeping in place an American blockade of Iranian ports.
Strait of Hormuz and Persian Gulf Disruptions Hit Supply
The fragile pause in hostilities has been overshadowed by uncertainty around the situation in the Strait of Hormuz. Tehran has reacted to the U.S. blockade by seeking to underscore its control over the waterway, attacking and seizing vessels in this key transit route that handles roughly a fifth of the world’s oil and liquefied natural gas.
The U.S. has likewise seized Iranian-flagged ships, and Trump has said he has ordered the Navy to “shoot and kill” Iranian boats attempting to lay mines in the strait.
As a result, European natural gas supply flows have been curtailed by the effective closure of the Strait of Hormuz, compounded by attacks on critical production infrastructure in the Persian Gulf, particularly in Qatar, a major production hub. In this environment, the TTF benchmark has remained well above pre-war levels for several weeks.
Additional Bullish Factors for European Gas
According to Reuters, citing LSEG data, further upside for European natural gas prices could emerge on Monday, when a projected decline in wind power generation is expected to lift gas demand from power plants.
In parallel, a strike at a liquefied natural gas facility in Australia could put additional strain on already tight global energy supplies, reinforcing the upward pressure on prices.
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