European Natural Gas Futures Fall Nearly 2% as Hormuz Strait Tensions Disrupt LNG Supply

On Tuesday, European natural gas futures fell nearly 2% to below €40 per megawatt-hour amid escalating geopolitical tensions. Traders are closely monitoring the second round of U.S.-Iran peace talks, with Iran preparing to send a delegation after initially declining participation. However, prospects remain uncertain as President Trump indicated the two-week ceasefire agreement expiring Wednesday is unlikely to be extended, and reaffirmed the Strait of Hormuz will remain closed until a deal is reached.

Weekend traffic disruptions in the Strait of Hormuz have intensified, with vessels coming under fire. According to reports, several liquefied natural gas tankers from Qatar were forced to turn back or remain stalled. Since the conflict erupted in late February, the region has seen no LNG exports, cutting off approximately 20% of global LNG supply.