European natural gas prices plummet after ceasefire agreement is reached

Investing.com - Wednesday, European natural gas prices fall sharply, boosted by an Iran war ceasefire deal, as the market hopes that supply constraints caused by the war can be eased.

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According to data from Intercontinental Exchange (ICE), as of 06:06 AM Eastern Time (19:06 Beijing time), the Dutch TTF hub front-month benchmark contract fell 14.6% to €45.50 per megawatt-hour. This is the biggest drop in the past month.

Many European countries use natural gas exported by producers from the Persian Gulf region (especially Qatar), despite the fact that in recent weeks Iran’s attacks on energy infrastructure in the area have affected supply flows.

On Tuesday, the United States and Iran reached an agreement to temporarily cease hostilities for two weeks. U.S. President Donald Trump had previously threatened that if Iran did not open the Strait of Hormuz before 8:00 PM Eastern Time on Tuesday, it would destroy Iran’s “civilization.”

Trump said on social media that the ceasefire was reached after conversations with Pakistan’s leadership, with Pakistan serving as a mediator between the United States and Iran. He added that the U.S. received a 10-point proposal from Iran, providing a viable basis for negotiations, and reiterated his claim that Washington “has achieved and exceeded all military objectives,” adding that “the two weeks will allow the agreement to be finalized and completed.”

Iranian Foreign Minister Abbas Araghchi said Tehran would “halt defensive operations” and make “safe passage” through the Strait of Hormuz possible, provided that shipping coordinates with Iran’s armed forces. Pakistan’s Prime Minister Shehbaz Sharif invited U.S. and Iranian officials to travel to Islamabad for talks before Friday. Vance did not clearly say whether he would take part in the negotiations, but said Trump “is eager to make progress in the discussions.”

The office of Israeli Prime Minister Benjamin Netanyahu said in a statement that Israel supports Trump’s decision. Israel had carried out attacks on Iran jointly with the United States in late February. However, the statement did not include Lebanon, where Hezbollah militants allied with Iran have been a target of Israeli strikes.

The agreement leaves some room for both sides to finalize a long-term peace deal and end the war. In addition to the military and humanitarian costs, many observers are concerned that the war could push up inflation pressures and weigh on the global economy.

However, media reports said that on Wednesday morning, the Persian Gulf region was hit by new military and drone strikes.

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