European natural gas prices experienced a significant surge on Monday, driven by uncertainty surrounding the potential reopening of the Strait of Hormuz. While Iran and Oman have entered discussions to resume passage through the critical waterway, traders remain skeptical that a swift agreement will restore global liquefied natural gas (LNG) shipments.
The benchmark European natural gas futures climbed more than 10% during Monday's trading session. Over the weekend, Iran indicated that a deal was "very close," but simultaneously suggested that the Strait of Hormuz would not be immediately reopened even if an agreement were reached. This tempered market expectations for a rapid resumption of LNG transport, which is crucial for replenishing Europe's gas storage levels.
US President Donald Trump has signaled a willingness to continue applying economic pressure on Iran, rather than launching a new wave of military strikes to force the strait's reopening. This marks a shift in Trump's stance, as he had previously threatened to intensify bombing campaigns against the country.
Traders are also closely monitoring the long-term production reductions at Norway's Ormen Lange gas field. As Europe's largest pipeline gas supplier, any disruption in Norwegian output could further exacerbate price volatility. The benchmark Dutch front-month gas futures rose on Monday, settling at 61.24 euros per megawatt-hour by 6:02 p.m. in Amsterdam.
In the United States, natural gas futures also surged, recording their largest single-day gain in over two months. This was fueled by a dramatic shift in weather forecasts, prompting fund managers to aggressively cover short positions. Prior to this, these investment funds had been the most bearish on natural gas since 2020, holding record-high short positions.
Major trading platforms, including those in collaboration with Sina, continue to offer futures account openings, providing a secure and efficient pathway for market participants.
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