European natural gas prices jumped over 10% on Monday after talks between Iran and Oman to reopen the Strait of Hormuz failed to assure traders of a quick resumption of global LNG flows, according to livemint.com. Despite Iran stating the agreement was "very close," it signaled that the deal would not immediately reopen the strait, dampening hopes for a swift restoration of supply to Europe.
The surge in benchmark futures followed weekend comments from Iran about the near completion of an agreement with Oman to reopen the critical shipping route. However, traders remained cautious as Iran indicated the reopening would not be immediate. Meanwhile, US President Donald Trump said he is willing to maintain economic pressure on Iran rather than pursue military action to force the strait's reopening, marking a shift in US policy.
The Strait of Hormuz is a vital chokepoint for global energy supplies, with a significant share of the world's liquefied natural gas passing through it. The uncertainty surrounding its reopening has intensified concerns over Europe's ability to replenish gas stockpiles ahead of winter. The price jump reflects market fears of prolonged supply disruptions, highlighting the geopolitical risks impacting energy markets amid ongoing tensions in the region.
Benchmark European natural gas futures rose more than 10% on Monday, the largest single-day increase in recent months, underscoring market sensitivity to developments around the Strait of Hormuz, according to livemint.com.