European natural gas prices surged to seven-month highs on Friday, with Dutch TTF front-month futures advancing 0.87% to €63.93 per megawatt-hour, the highest since March 19, as geopolitical tensions in the Strait of Hormuz curbed liquefied natural gas (LNG) flows.
British wholesale gas contracts also climbed to five-month peaks, extending a multi-week rally that has pushed benchmark prices up more than 7% over the past week. The forward gas curve remained in deep backwardation, with near-term contracts trading at steep premiums to later-dated ones—a sign of tight near-term supply.
Analysts cited the prolonged disruption to LNG shipments through the Strait of Hormuz, a critical chokepoint for global gas trade, as a key driver. Historically, about 20% of global LNG transits pass through the strait, but vessel movements have fallen to single-digit daily levels amid regional tensions. U.S. President Donald Trump escalated rhetoric, vowing "economic warfare" against Tehran and threatening unprecedented sanctions on any nation providing financial support to Iran.
European gas storage levels stood at roughly 60% of capacity, according to Gas Infrastructure Europe data, trailing seasonal five-year averages by about 17 percentage points. The deficit underscores the region’s vulnerability ahead of winter, with analysts warning that further disruptions could exacerbate price volatility.
The rally follows weeks of tight balances in European gas markets, where storage replenishment has lagged despite efforts to diversify supply away from Russian sources.
