European natural gas prices moved higher on Thursday as tensions between the United States and Iran escalated, even after an announced extension of a short-term ceasefire. Markets registered gains as uncertainty around shipping security and supply disruptions persisted.
Price move - By 08:44 ET (12:44 GMT), the Dutch front-month contract at the TTF hub had increased by 2.1% to 44.39 euros per megawatt hour (MWh), according to data from the Intercontinental Exchange.
Military and maritime developments - The U.S. military reported that it had seized another oil tanker affiliated with Iran, with the Defense Department releasing footage said to show American troops on the vessel's deck while it sailed in the Indian Ocean. The action comes amid heightened confrontations in and around the Strait of Hormuz.
Separately, Iran released video footage that appeared to show its forces boarding a large cargo ship in the Strait of Hormuz, a strategically critical waterway off Iran's southern coast. Tehran has said it carried out attacks on three vessels in the strait on Wednesday, seizing two of them. Iranian officials characterized those actions as responses to what they described as an American blockade of the country's ports and to the prior U.S. seizure of an Iranian-flagged ship.
Ceasefire context - Earlier in the week, President Donald Trump announced in a social media post that a two-week ceasefire deal with Iran had been extended just hours before it was due to expire. He said the extension was made at the request of Pakistan, which has acted as a mediator between Washington and Tehran, and that the truce would remain in force "until such time as" Iranian officials present a "unified proposal" for peace. Despite that announcement, recent actions at sea have undercut hopes for a near-term easing of tensions.
Impact on shipping and supply - Tanker traffic through the Strait of Hormuz - the channel through which roughly a fifth of the world's oil transits - has been effectively halted since the start of the conflict in late February. The closures have amplified concern over energy flows to global markets.
Europe's exposure to the wider energy shock has been compounded by reported damage to natural gas production facilities in the Middle East, with particular mention of impacts in Qatar. Benchmark natural gas prices in Europe remain above the levels seen before the commencement of the joint U.S.-Israeli assault on Iran, reflecting ongoing supply risk and market anxiety.
Market participants continue to watch developments in the Gulf closely, as further naval or military escalations could reinforce upward pressure on European gas benchmarks and extend the period of elevated prices.
Key takeaways
- European TTF natural gas rose 2.1% to 44.39 euros/MWh by 08:44 ET (12:44 GMT) on Thursday.
- U.S. forces seized another tanker linked to Iran, and Iran reportedly boarded and seized vessels in the Strait of Hormuz.
- Shipping through the Strait of Hormuz has been largely closed since late February, contributing to higher benchmark gas prices and supply concerns.