-- European natural gas futures were plunged more than 8% on Friday after US President Donald Trump and Iran announced that the Strait of Hormuz had reopened.
The front-month Dutch TTF contract dropped 8.79% to 38.69 euros ($45.81) per megawatt-hour, while UK NBP futures dropped 8.45% to 97.20 British pence ($1.42) per therm.
Both benchmarks were set for another weekly loss, with Dutch TTF down 10.78% and UK Gas 10.98% lower, week on week, according to Trading Economics.
In a Truth Social post on Friday, Trump said that Iran had just announced that the strategically crucial Strait, which usually accounts for 20% of global LNG flows, was now open and "ready for full passage."
Iran's Foreign Minister, Seyed Abbas Araghchi, confirmed this in a post on X, saying that the Strait was "completely open." However, he noted that this was only for the "remaining period of ceasefire," which is set to end on Tuesday, if not extended again.
Traffic in the Strait remained sparse for the seventh week running, prior to the late-Friday opening, with just 8 vessels transiting through it over the past 24 hours, according to the Hormuz Strait Monitor.
Fatih Birol, head of the International Energy Agency, has warned that even if the Strait fully reopens and indefinitely so, it would take at least two years for energy output in the Middle East to return to normal.
In an interview with the Neue Zuercher Zeitung newspaper on Friday, Birol said that this will vary across different countries, "Iraq, for example, will take much longer than in Saudi Arabia," he said.
This comes at a difficult juncture for European natural gas markets, with inventory levels at just 29.56% of total capacity, compared to 35.97% last year, according to Gas Infrastructure Europe.
Fortunately, Europe is forecast to experience a warmer-than-average climate this summer, supported by a broader global warming trend and the emergence of a potential Super El Nino, which typically raises temperatures, according to Severe-Weather EU, resulting in lower heating gas demand.