Europe’s Gas Crisis Is Getting Worse and Winter Is Only Months Away
TLDR
- Dutch front-month gas futures rose 0.5% Friday to around €57.50/MWh but still fell roughly 2.5% for the week
- Back-to-back weekly declines driven by tentative diplomatic progress on Middle East maritime corridors
- LNG vessel traffic through the Strait of Hormuz remains severely restricted despite ongoing mediation
- EU gas storage is just 55-57% full entering August, well below the five-year average of 71%
- Iranian naval activity near the strait and demands around vessel passage are keeping supply uncertainty elevated
European gas prices ticked higher on Friday but still closed out their second straight week in the red, as easing geopolitical fears clashed with a tight physical market and fresh tensions in the Persian Gulf.
Benchmark Dutch front-month futures rose 0.5% to around €57.50 per megawatt-hour on Friday. That small gain was not enough to offset the week’s losses, with prices finishing down roughly 2.5% from the previous Friday.
The back-to-back weekly declines came as diplomatic efforts to reopen shipping lanes through the Strait of Hormuz took some heat out of the market. Oman and Qatar have been mediating talks aimed at establishing safe maritime corridors through the waterway, which caused energy traders to pull back on risk premiums that spiked late in July.
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