Iran rejects US peace proposal, lifting TTF 2% as cold weather and storage deficit bite
The front-month contract touched EUR 54.17/MWh after Tehran refused to negotiate, stacking supply risk onto a market already failing to refill storage.
European benchmark gas prices rose 2% on Thursday (2026-05-21) after Iran said it was not prepared to negotiate despite receiving a US peace proposal, while forecast cold weather added support, Montel reported.1
The ICE Endex TTF front-month contract initially rose to EUR 54.17/MWh in intraday trading before settling near the day's high.1 Over the past month the contract had climbed about 26%, and was up roughly 37% on a year earlier, according to trading data cited by Trading Economics.4
The move compounds a physical problem: Europe is not refilling storage fast enough. Inventories sit around 7.2 bcm, or 17%, below last year's level, according to Timera Energy.3 The culprit is the TTF forward curve itself, which backwardation has pushed into territory that removes the economic incentive to inject, Timera noted, leaving physical traders inclined to draw molecules rather than store them.3
Iran's stance on Thursday (2026-05-21) erased the tentative optimism that had pulled the front-month back to around EUR 49.8/MWh on Monday (2026-05-19), when markets briefly priced a potential Strait of Hormuz reopening after three Gulf allies requested more time from the Trump administration.4 Front-month TTF prices have been quite volatile, one analyst told Montel, reacting to mixed signals from Iran and the US on the possibility of starting negotiations.1
The disruption is already measurable. Global gas prices surged in March to their highest level since the 2022/23 gas crisis, with almost 20% of global LNG supply disrupted at the Strait of Hormuz, according to Global LNG Hub.5 Asian markets are the most directly exposed, with Hormuz accounting for more than 25% of the region's LNG supply, the same source said, and any cargo diverted from Europe to Asia tightens the European balance directly.5
The Qatari supply picture is worse. Military strikes on the Ras Laffan industrial complex, responsible for around 20% of global LNG supply, have taken 17% of Qatar's LNG capacity offline for three to five years, according to Elenger.2 That is a multi-year hit rather than a seasonal one; even a reopening of Hormuz on 22 May would leave Europe facing a tighter LNG market than in early 2025.2
Analysts see material upside. Europe's benchmark TTF price could rise to almost EUR 100/MWh if the Middle East war and the consequent shut-in of Qatari LNG last three months, an average of analyst projections showed on 26 March, Montel reported.6 That would be roughly double Thursday's (2026-05-21) close, and the injection season has only just begun.6
The context helps explain the scale of the repricing. The ICE Endex TTF front-month closed the fourth quarter at 26.73 EUR/MWh, then began rising in the second week of January and exceeded 33 EUR/MWh during that month, an increase of more than 20% on the end of Q4, before easing in February, Elenger said.2 Trading Economics macro models point to the front-month trading near 51.61 EUR/MWh by the end of this quarter.4
The next signal to watch is the US-Iran diplomatic track, or its absence. Tehran has now publicly rejected one peace proposal, and traders are positioned as if the disruption will persist, but each headline can shift that calculus in a session.1 If storage deficits carry through the summer, winter prices will hold a scarcity premium regardless of what happens in the Gulf.3