European gas holds near three-year peak as Iran declares maritime exclusion zone

Energy benchmark movements in Europe and the US

European benchmark natural gas contracts in Amsterdam (ICE Endex Dutch TTF) fell 1.1% to 78.33 euro per megawatt-hour on Thursday morning. The slight decline followed four consecutive sessions of gains that lifted European gas prices by 10%, keeping contracts near three-year highs and more than double their levels before the war. In crude oil markets, West Texas Intermediate contracts for October delivery traded at 95.63 dollars per barrel on the NYMEX in New York, down 0.44% on the day after rising 3.3% in the prior session to exceed 97 dollars. Brent crude for November delivery traded at 100.46 dollars per barrel on the ICE, down 0.74% after closing above 101 dollars in the previous session for the first time since July. Military strikes targeting energy infrastructure between Russia and Ukraine also contributed to supply uncertainty in European markets.

Iranian maritime restrictions in the Gulf of Oman

The Islamic Revolutionary Guard Corps announced on Wednesday that a newly established exclusion zone for shipping will extend from the port of Chabahar into the Gulf of Oman and the Arabian Sea. The precise coordinates of the zone are scheduled for release at a later date. This step follows statements made on Sunday by Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, who told state television that the zone begins where the US naval blockade starts and encompasses parts of the Persian Gulf. Iran is seeking complete control over the Strait of Hormuz, a waterway that accounted for approximately 20% of global oil and liquefied natural gas transit prior to the war. Iranian authorities announced that vessels navigating the strait must coordinate their routes with Tehran and pay transit fees. A senior Iranian official confirmed that Iran is prepared for extended warfare and strong counterstrikes if the United States continues targeting Iranian domestic infrastructure.

Political pressure surrounding US midterm elections

US President Donald Trump addressed the conflict on Wednesday before departing for the Republican Party convention in Dallas. Trump told reporters at the airport that the war with Iran will conclude immediately after the congressional midterm elections scheduled for 3 November 2026, which will decide all seats in the House of Representatives and 35 Senate seats. Trump asserted that crude oil prices will fall rapidly once the vote concludes.

Iran cannot hold out any longer, it is desperately trying to influence the election outcome.

Financial institutions note that high fuel costs remain a central challenge for voters ahead of the vote. Warren Patterson, head of commodities strategy at ING Groep NV, pointed out that sustained energy inflation directly affects the pre-election political climate.

Rising oil prices will be a cause for concern ahead of the US midterm elections.

European storage deficits and market forecasts

Data compiled by Gas Infrastructure Europe indicates that European Union natural gas reserves stand at 67.3% of total capacity, holding 761.84 terawatt-hours of fuel, compared with the five-year seasonal average of 83.7%. This represents the lowest storage level recorded for this time of the year. Storage levels show wide disparities across member states, with German facilities filled to 55.0% capacity against a five-year average of 82.5%. In contrast, Poland maintains 35.69 terawatt-hours of gas in storage, reaching 96.9% capacity. In a baseline forecast reported by CNBC, Goldman Sachs co-head of commodities research Daan Struyven noted that alternative shipping routes and infrastructure could gradually restore Gulf exports, but added that Brent crude surpassing 120 dollars per barrel is an increasingly probable outcome if export flows remain interrupted.