Investing.com – European wholesale natural gas prices accelerated their rally on Wednesday afternoon, with both Dutch and British benchmark contracts surging 6% after U.S. President Donald Trump expressed deep pessimism regarding the framework peace deal with Iran.
While European inventories remain comfortably stocked for the peak summer replenishment season, the risk of a formal collapse of the month-old truce has re-injected a heavy geopolitical risk premium into the energy matrix. Traders are scrambling to price in long-term vulnerabilities to global liquefied natural gas (LNG) supply chains.
TTF AND UK balancing point spike
The front-month Dutch TTF gas contract, the benchmark for continental Europe, jumped 6.0% to trade at 49.3 euros per megawatt-hour (MWh) by late afternoon. In the United Kingdom, the equivalent front-month British wholesale gas contract closely matched the move, surging 6.1% to 117.2 pence per therm.
Prices had already been trading up roughly 4% at mid-day on escalating tensions in the Middle East, but the selling intensified following President Trump’s comments at a NATO summit in Turkey.
Trump accused Tehran of double-dealing and cast severe doubt on the status of the Islamabad Memorandum of Understanding (MoU), which had established a fragile ceasefire framework in June.
“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump said.
The market’s afternoon leg up came after the Iranian armed forces confirmed they had targeted U.S. military bases in Kuwait and Bahrain. Tehran stated the strikes were direct retaliation for prior American targeting of Iranian sites and Washington’s decision to revoke a critical sanctions waiver on Iranian oil exports.