UK natural gas futures fell more than 9% toward 128 pence per therm on Wednesday, retracing part of a nearly 70% spike over the previous two sessions. The move tracked declines in the European benchmark after reports that Iran may be open to negotiations aimed at ending the conflict in the Middle East.
The UK market remains particularly vulnerable due to limited storage capacity and a heavy reliance on imports, with inventories standing below 30% at the end of February. Although Iranian operatives have reportedly reached out to the US to discuss potential terms, officials are skeptical that any agreement can be reached in the near term.
The conflict has already disrupted critical energy infrastructure, including operations at the world’s largest LNG facility in Qatar. In addition, shipping through the Strait of Hormuz remains heavily constrained, stoking concerns over a broader global supply squeeze. For now, European gas supplies have been spared direct disruption, as cargoes scheduled for March are already in transit.
Separately, former US President Donald Trump stated that the United States would secure shipping lanes and provide naval escorts for vessels if necessary.
