Heightened verbal threats from US President Donald Trump, who warned of destroying Iran's critical infrastructure if it fails to meet his demands by a Tuesday deadline, have led to a modest increase in European natural gas prices. Benchmark futures rose by as much as 3.1%, building on a more than 55% gain since the onset of the US-Iran conflict. At the time of writing, the Dutch near-month natural gas futures—Europe's benchmark—were up 1.5%, reaching €50.80 per megawatt-hour. President Trump stated that Iran’s latest ceasefire proposal was "still not good enough" and reiterated that if the Strait of Hormuz is not reopened by the deadline, the US would launch a large-scale attack on key Iranian infrastructure. Mediators expressed pessimism about Iran "capitulating" and reopening the strait before Trump’s deadline, describing the prospects of a ceasefire agreement as "fading." Trump claimed that if no deal is reached by 8 p.m. ET Tuesday (8 a.m. Wednesday Beijing time), US forces would need only "four hours" to destroy all of Iran’s bridges and power stations, rendering them permanently unusable. He also insisted that freedom of navigation through the Strait of Hormuz must be part of any agreement, calling the strait’s reopening "a very important priority." Iran has warned that it would escalate attacks on energy infrastructure in the Persian Gulf if subjected to such a strike—a move that could further strain global energy supplies. For European natural gas in particular, prolonged supply disruptions could complicate efforts to replenish fuel inventories, which currently stand at just over 28%. Although most of the Middle East’s natural gas typically flows to Asia, ongoing supply interruptions in the region could intensify competition for limited global liquefied natural gas (LNG) resources. According to traders, Iran has not allowed any LNG-carrying vessels to pass through the Strait of Hormuz for weeks, a ban that risks worsening global LNG shortages. Since the conflict began, the number of vessels transiting the strait has dropped sharply. Tankers and other ships usually require Iranian permission to pass slowly through the narrow waterway—with one-fifth of global LNG supplies still cut off.
Comments