European wholesale gas prices locked in a 12% weekly gain on Friday after U.S.-Iran diplomatic backchannels collapsed and fresh strikes hit the Persian Gulf. Crude oil did not follow, and EU storage at 71% full failed to calm buyers.
European wholesale natural gas prices surged to over one-week highs on Friday, locking in a 12% weekly gain. The move followed the collapse of U.S.-Iran diplomatic backchannels and new military strikes in the Persian Gulf, which triggered a scramble for winter supply security.
The benchmark Dutch Title Transfer Facility front-month contract jumped 4.2% to 96.18 euros per megawatt-hour. Its British equivalent, the National Balancing Point contract, climbed 3.8% to 239 pence per therm. Meanwhile, crude oil benchmarks were on track for a second consecutive weekly loss.
Trump ends the diplomatic track
U.S. President Donald Trump said in a Truth Social post on Thursday that Washington no longer needed an agreement with Tehran. He argued that the U.S. had already established financial leverage over Iran and secured control of the Strait of Hormuz.
Trump also instructed Vice President JD Vance to abandon negotiations with Iran. Washington indicated that its naval blockade of Iranian trade and oil shipments will remain in place alongside broader economic sanctions.
Gulf attacks add to the pressure
The physical threat to energy infrastructure grew as Yemen's Iran-backed Houthis renewed attacks on Saudi facilities, while fresh strikes hit crude tankers in the Gulf. On Friday, Iran's Revolutionary Guards claimed they targeted a U.S. early-warning radar in Bahrain. The Guards called it retaliation for an alleged air attack on a telecommunications tower in Iran's southern Sirik county.
Storage does not offset the risk
Physical supplies remain stable for now, with EU gas storage at 71% full. Even so, European utility buyers and LNG hedging desks no longer view that buffer as sufficient insurance against a worst-case scenario.
As a result, traders are pricing a geopolitical risk premium back into forward winter contracts. They fear a wider regional war could choke off LNG transit routes just as the Northern Hemisphere heating season begins.
Source: Investing.com
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