European natural gas prices are rising due to continued constraints on liquefied natural gas supply through the Strait of Hormuz.

Natural gas prices in Europe are rising due to continued severe limitations on liquefied natural gas supply through the Strait of Hormuz, leading to a tightening of global supply. In early trading, the benchmark Dutch TTF natural gas futures near-month contract rose by 1.2% to 50.67 euros per megawatt hour. Data from Kpler shows that two liquefied natural gas carriers seemingly headed towards the Strait of Hormuz turned back on Monday. "The global liquefied natural gas market has shifted from a brief supply disruption to a period of structural tightness," analysts at ANZ Bank said. "Even if shipping routes are reopened, Qatar's missing production cannot be quickly replenished, leading to market clearance through price increases, inventory declines, and demand rationing." These analysts stated that inventory tightening is reducing flexibility in Europe and Asia, exacerbating market sensitivity to weather and supply interruptions. At the same time, as buyers turn to long-term contracts for security, liquidity in the spot market is weakening.