European Gas Market Update
European wholesale natural gas prices eased on Thursday. The benchmark Dutch TTF contract slipped 0.8% to trade near €48.5 per megawatt‑hour, after having surged on Wednesday to its highest level since mid‑June.
The British wholesale gas contract (NBP) held steady at 116.86 pence per therm, retreating from a multi‑week peak reached during the previous session’s frantic global energy sell‑off.
The price volatility follows a rapid deterioration in Middle‑East geopolitics. A memorandum of understanding signed on June 17 between Washington and Tehran, which had raised hopes of a sustained reopening of the Strait of Hormuz – a transit route for roughly 20% of global liquefied natural gas – was declared “over” by U.S. President Donald Trump. The declaration was quickly followed by a second consecutive day of U.S. air strikes aimed at defending the chokepoint against Iranian retaliation.
For European buyers, the collapse of the deal revives fears of structural supply disruptions as the region remains reliant on global LNG to replace lost Russian pipeline volumes. Storage facilities across the continent are reported to be slightly below seasonal historical averages, intensifying concerns as Europe approaches the pre‑winter stock‑building phase.
The renewed surge in wholesale gas costs threatens to leak back into industrial and consumer electricity bills, presenting a major roadblock for central banks attempting to declare victory over inflation. The spike in gas prices is occurring alongside movements in crude oil, reinforcing broader macro‑economic anxieties across Europe.