Eased tension, eased prices; European natural gas prices slump following ceasefire deal

European natural gas prices slumped on Wednesday, buoyed by hopes that supply constraints caused by the war in Iran may be cleared following a ceasefire in the Iran war.

The benchmark Dutch front-month contract at the TTF hub was down by 14.6% at 45.50 euros per megawatt hour by 06:06 ET (10:06 GMT), according to ICE data. It was the biggest fall in nearly a month.

Many European countries use natural gas exported from producers in the Persian Gulf, particularly Qatar, although flows have been dented by Iranian attacks on energy infrastructure in the region in recent weeks.

On Tuesday, the U.S. and Iran reached a deal to temporary halt hostilities for two weeks. U.S. President Donald Trump had earlier threatened to eradicate Iranian “civilization” if the country did not open the Strait of Hormuz by 8 p.m. Eastern on Tuesday.

Trump said on social media that the truce followed conversations with leaders from Pakistan, which has served as a mediator between the U.S. and Iran. He added that the U.S. received a 10-point proposal from Iran which provides a workable basis for negotiations, and reiterated his claims that Washington had “already met and exceeded all Military objectives” and the “two week period will allow the Agreement to be finalized and consummated.”