European natural gas prices climbed after Iran's president stressed the vast differences between Iran and the United States amid the ongoing war, dimming hopes that energy flows through the Strait of Hormuz could return to normal in the near term.

Benchmark futures rose as much as 4.2% on Thursday. As of press time, the Dutch front-month contract, Europe's gas benchmark, was up 3.44% at 74.49 euros per megawatt-hour. This week's trading has been volatile, with traders weighing geopolitical developments against Europe's push to rebuild depleted gas inventories before winter.

Iranian President Masoud Pezeshkian on Wednesday laid out a series of conditions that must be met before any substantive talks with Washington can resume, insisting that Tehran will not allow freedom of navigation through the Strait of Hormuz as long as sanctions and the U.S. blockade remain in place. His speech at the United Nations General Assembly undercut signs of initial diplomatic progress that had emerged earlier this week.

Although there are indications that more oil cargoes are passing through the Strait of Hormuz, liquefied natural gas (LNG) flows remain sluggish because LNG relies on specialized carriers and is more vulnerable to security risks in the strait.

European gas prices resumed their rise on Thursday. A persistent shortage of Middle Eastern LNG means Europe will face fiercer competition with Asia for limited global supply as traders work to replenish inventories. European gas storage is currently just above 70%, below the seasonal norm of 86%.

Tightening the market further, pipeline gas flows from Norway to the continent have declined due to maintenance at gas facilities. The EU Gas Coordination Group is scheduled to meet on Thursday to discuss the supply situation.