European gas extends rally above €70/MWh on supply-security fears

European natural gas prices extended gains on Tuesday, moving above €70/MWh to their highest level since January 2023 as tensions between the US and Iran raised concerns about Europe’s gas supply security heading into the heating season. The US and Iran exchanged strikes for the first time in a month over the weekend, stoking worries that the effective closure of the Strait of Hormuz could last longer. Roughly one-fifth of global LNG trade normally passes through the waterway. That prospect has sharpened competition with Asian buyers and tightened supplies headed for Europe during the critical gas-storage refill season.

EU gas storage facilities were around 64% full, below historical levels for this time of year. Lower storage levels and uncertainty over LNG supplies from the Persian Gulf are adding to price pressure, even as milder weather forecasts for early September could curb near-term demand.