Trump scraps Iran ceasefire as European gas jumps 5%
ICE Endex TTF front-month surged after US President renewed strikes in the Persian Gulf, reviving supply risk traders had begun to discount.
European benchmark gas prices surged 5% on Wednesday (2026-07-08) after US President Donald Trump declared the Iran ceasefire "over" and ordered renewed strikes in the Persian Gulf, according to Montel. Trump told reporters: "It's over, I don't want to deal with them anymore, they're scum."8
The move reverses a partial retreat in risk premium built through May. ICE Endex TTF front-month had traded as high as EUR 54.17/MWh on Thursday (2026-05-21) when Iran rejected a US peace proposal, then eased toward EUR 49.8/MWh by Monday (2026-05-19) on hopes for a diplomatic settlement. Wednesday's (2026-07-08) jump signals traders are repricing the probability of prolonged disruption to LNG flows through the Strait of Hormuz.1,5
LNG accounts for around 25% of Europe's total gas supply, according to Stifel analyst Chris Wheaton. Qatar's Ras Laffan complex — responsible for roughly 20% of global LNG capacity — sustained damage from military strikes earlier this year that will keep 17% of Qatari LNG offline for three to five years, Elenger reported. The combination of lost Qatari volumes and renewed chokepoint risk leaves European buyers exposed to Atlantic basin spot LNG, where prices remain elevated.6,3
ICE Endex TTF front-month closed Thursday (2026-07-08) at EUR 49.13/MWh, unchanged from the prior session, though intraday volatility reflected trader uncertainty about whether the US would commit ground forces or limit action to airstrikes. European gas has risen 37% year-on-year and 26% over the past month, with prices more than doubling the EUR 26.73/MWh recorded at the end of last quarter.5,3
Montel quoted analysts saying European gas markets "face renewed uncertainty" after the ceasefire collapse. The Hormuz transit risk had begun to fade in late May as diplomacy appeared to gain traction, but Wednesday's (2026-07-08) exchange of strikes between US and Iranian forces eliminates that reprieve. Storage inventories entered the second quarter below the five-year average after a cold snap accelerated withdrawals in early 2026, leaving less margin for supply shocks during the injection season.8,3
Oil markets moved in the opposite direction. ICE Brent crude front-month traded at USD 78.79/barrel on Thursday (2026-07-08), down sharply from the USD 111.28 recorded on Wednesday (2026-05-15) when the Hormuz closure appeared imminent. That divergence suggests traders view the gas impact as more persistent than the crude disruption, likely because Europe's LNG import infrastructure is less flexible than global oil tanker routing.4
Trading Economics models forecast ICE Endex TTF front-month at EUR 51.61/MWh by the end of the third quarter, though that projection predates Wednesday's (2026-07-08) escalation. The forward curve shows the quarter-ahead contract at EUR 42.37/MWh and the calendar-year-ahead at EUR 34.45/MWh, implying the market still expects some normalisation — either through increased Norwegian pipeline flows or a return to diplomacy.5
But the ceasefire collapse complicates that baseline. Front-month TTF volatility through May reflected "mixed signals from Iran and the US on the possibility of starting negotiations," Montel reported on Thursday (2026-05-21). Those mixed signals are now resolved in the direction of conflict, removing the near-term probability of Hormuz reopening and Qatari LNG restoration.1
The risk is compounded by Europe's dependence on spot LNG during summer injection season. Storage levels need to rebuild after winter depletion, yet the Atlantic basin is already tight and NYMEX Henry Hub front-month gas — which sets the marginal cost for US LNG exports — traded at USD 3.22/mmBtu on Thursday (2026-07-08), limiting arbitrage opportunities. Asian JKM LNG stood at USD 16.51/mmBtu, well above European netbacks, pulling cargoes east.3
Traders will watch whether Trump's renewed military posture triggers a formal closure of the strait or remains limited to targeted strikes. A full closure would cut off not just Qatari LNG but also crude flows that underpin refinery runs and diesel supply across Asia and Europe. The May precedent — when TTF rose 3% in a single session on standoff headlines — offers a floor for how the market might react to an outright blockade.2,7
The risk is whether European utilities accelerate restocking or wait for clarity on the conflict's duration. Summer demand is lower, but procurement decisions made now will dictate how much flexibility Europe has entering next winter if the Hormuz risk persists into the fourth quarter.