European natural gas prices plunged by 8.6% at the open in Amsterdam on Monday as the United States paused strikes on Iran over the weekend and Tehran signaled a halt to retaliatory attacks across the Middle East.
Hopes of de-escalation sank oil prices on Monday in Asian trade, too, with Brent Crude dropping to $90 per barrel.
Europe’s benchmark natural gas prices, which had surged in the past two weeks amid the renewed hostilities, retreated on Monday from the multi-month highs of last week, as the market hopes for a diplomatic push to reopen the Strait of Hormuz and help get Qatar’s LNG out of the Persian Gulf.
The August 2026 contract of the Dutch TTF Natural Gas Futures slumped by as much as 8.58% to $66.29 (58.12 euros) per megawatt-hour (MWh) as of 6:46 a.m. Amsterdam time on Monday, down from Friday’s intraday high of over $73 (64 euros) per MWh.
The price on Friday was the highest over the past year as the threats to energy flows in the Middle East grew last week amid the Houthi blockade of the Bab el-Mandeb Strait, adding to the near-closed Strait of Hormuz.
The de-escalation over the weekend is good news for Europe, but until Qatari flows recover, the EU gas storage levels are at risk of lagging behind the bloc’s refill targets ahead of the next heating season.
The renewed hostilities in the middle of July put an abrupt end to the recovery of Qatari LNG flows. It’s unclear when and how more supply could come out of the Middle East to ease the pressure on the LNG market, in which Europe is losing the competition with Asia for supply.
Europe is heading for the second-lowest level of gas storage for this time of year in 15 years and well below the five-year average, which has prompted a race against time to procure LNG for the winter.
By Tsvetana Paraskova for Oilprice.com
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