Natural gas prices in Europe fluctuated after US President Donald Trump escalated threats to destroy key Iranian infrastructure if his terms for a conflict resolution deal were not met by Tuesday's deadline, UNN reports, citing Bloomberg.
Details
Benchmark futures fluctuated between relatively small gains and losses as traders awaited the outcome of Trump's threats. Contracts have risen in price by more than 50% since the start of the war.
Trump stated that the American military could destroy "all bridges in Iran by 12 o'clock tomorrow night" if the country did not reach an agreement by the 8:00 PM ET Tuesday deadline. Power plants "will burn, explode, and never be used again."
He also insisted that freedom of navigation through the Strait of Hormuz must be part of any agreement, calling its reopening a "very important priority." Iran has warned that in response to such strikes, it would intensify its own attacks on energy infrastructure in the Persian Gulf – a step that could further reduce global energy supplies.
"The market is now waiting to see what happens with the ultimatum," said EnergyScan's report from Engie SA.
For European gas in particular, prolonged curbs risk complicating efforts to refill fuel inventories — which are now just over 28% full — ahead of next winter. While most gas from the Middle East normally goes to Asia, continued disruptions there could intensify competition for a limited global pool of liquefied natural gas.
According to traders, Iran has not allowed any LNG tankers to pass through the Strait of Hormuz in several weeks of war, which could exacerbate the global shortage. Traffic through the strait has sharply decreased since the start of the war. Oil tankers and other vessels are gradually passing through the narrow waterway, usually with Iran's permission, while a fifth of global LNG supplies remain inaccessible, the publication writes.
On Tuesday, price fluctuations were exacerbated by low trading volumes, as many market participants remained on the sidelines after the Easter holidays in Europe. Trading has already decreased over the past month amid persistent uncertainty surrounding the conflict.
Futures for the Dutch gas benchmark for delivery in the nearest month traded 1% cheaper at 49.52 euros per megawatt-hour by 10:52 AM in Amsterdam.
Recall
Oil continues to rise amid Trump's escalating rhetoric regarding Iran.