European natural gas prices rose to €68.6/MWh on Friday, extending the previous session’s gains and approaching their highest level since January 2023, as supply risks persisted amid uncertainty over a Middle East peace agreement. Prices had surged on Thursday following reports that President Trump was not interested in reinstating the terms of a June accord with Iran. That move erased losses from earlier in the week, when prices had fallen on signs of progress in talks between Pakistan and Iran to end the conflict, as well as on an agreement between Tehran and Oman over control and revenue-sharing linked to the Strait of Hormuz.
The near-closure of the Strait has continued to disrupt LNG shipments from Qatar, while extreme summer heat has driven up cooling demand, diverting gas from storage. This combination has left Europe scrambling to secure additional supplies and has intensified concerns that the region could enter the winter heating season with inadequate reserves. Over the week, European gas prices gained more than 3%, marking a third consecutive weekly increase.
