UK natural gas prices climbed above 114 pence per therm on Wednesday, the highest level in nearly a month, as escalating tensions in the Middle East revived concerns over potential supply disruptions. According to reports, Iran launched drones at US military facilities in Bahrain and Kuwait. Earlier, the United States had conducted strikes on Iranian targets and revoked a license that had allowed Tehran to export oil, following attacks on three merchant vessels in the Strait of Hormuz.
These latest developments threaten the interim agreement struck last month that had reopened this critical shipping corridor. Prices were further supported by forecasts of an intense heatwave across parts of Northwest Europe, which is expected to lift electricity demand for air conditioning and, in turn, increase gas-fired power generation. This comes against the backdrop of a slower-than-usual pace of seasonal gas storage injections. In addition, flows from Norway—currently the region’s largest single pipeline supplier—have edged lower after the extension of seasonal maintenance.
