The renewed escalation of tensions between the US and Iran and uncertainty regarding shipments around the Strait of Hormuz have brought about a price increase in the European natural gas market. Dutch TTF natural gas contracts, which are monitored as a benchmark across the continent, have reached their highest level since April.
According to data from the London-based Intercontinental Exchange (ICE), the benchmark one-month Dutch natural gas contract traded at the TTF hub rose by 1.73 euros to 53.01 euros per megawatt-hour.
The upward movement in the European market was also reflected in the UK. One-month natural gas contracts traded in the UK rose by 4.15 pence to trade at 128.30 pence per therm.
Concerns that shipments could be disrupted in the Strait of Hormuz, which is seen as one of the world's critical energy transit points, were effective in the price increase. Security concerns in the energy corridor have strengthened supply risk pricing in the markets.
US President Donald Trump announced in a statement yesterday that the blockade against Iran has been restarted. Trump also stated that the US would act as the "Guardian of the Strait of Hormuz" and that a 20 percent fee would be collected on all cargo transported through the strait.
Following these statements, while uncertainty in energy markets has increased, it is assessed that the rise in European natural gas prices shows that sensitivity to geopolitical developments in the region continues.
News Source: 12punto
