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Geopolitics · LNG · Natural Gas · Strait Of Hormuz
European natural gas prices, specifically TTF futures, have seen fluctuations driven by geopolitical tensions between the US and Iran, impacting LNG trade routes.
Initially rising to €33 per megawatt-hour due to fears of supply disruptions via the Strait of Hormuz, a key chokepoint for 20% of global LNG, prices later fell by 5% to around $31.7 as comments from Donald Trump suggested a limited strike, easing immediate supply interruption fears. The market remains sensitive to these geopolitical risks, especially with low EU inventories (around 32%, Germany below 22%), although warmer weather and strong renewables offer some counterbalancing factors.
Military drills by Iran and US buildup in the region have underscored the potential for supply shocks, adding a risk premium to the market.