Energy prices rebound after reported LNG carrier attack near Hormuz

European natural gas and oil prices rose on Tuesday after reports that an LNG carrier was attacked near the Omani coast while exiting the Strait of Hormuz, renewing concerns over energy shipments through the strategic waterway.

European benchmark natural gas prices gained more than 4.5%, moving to €46 ($52.5) per megawatt-hour as of 0705GMT, after recouping losses from the previous session.

Iranian state television IRIB reported that the vessel came under attack after allegedly disregarding warnings, though it did not directly claim responsibility for the assault.

The reported attack added to market concerns at a time when weather forecasts point to another spell of extreme heat in Northwest Europe, which is expected to increase air-conditioning use and power demand.

The demand outlook has raised concerns over Europe’s ability to rebuild gas inventories before winter, with storage facilities currently around 49% full, compared with nearly 60% at the same period last year.

Oil prices also moved higher, with international benchmark Brent crude rising 1.2% toward $73 per barrel, its highest level in a week.

The incident raised fresh questions over the durability of the US-Iran agreement aimed at preventing attacks in the Strait of Hormuz, one of the world’s most important energy transit routes.

Still, crude prices remained close to their lowest levels since late February as expectations of rising supply continued to weigh on the market.

Reports showed that at least eight Japan-linked vessels exited Hormuz via a route near Iran, including five supertankers each capable of carrying around 2 million barrels of crude.

Saudi Aramco also cut the price of its Arab Light crude for Asian buyers next month, widening its discount to the regional benchmark amid softer market conditions.