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EMEA Natural Gas Update: Futures Down Nearly 5% as US-Iran Peace Talks Progress

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European natural gas futures witnessed a steep decline on Monday, reaching their lowest level in weeks as US-Iran peace deal progresses steadily.

The Dutch TTF front-month contract fell 4.94% to 46.280 euros ($53.87) per megawatt hour, while UK markets were closed on Monday due to the Spring Bank holiday.

In a Truth Social post on Saturday, US President Donald Trump said that the peace agreement with Iran had been "largely negotiated" and was only subject to finalization between the two countries and other surrounding nations that were involved in the process.

Trump also added that, in addition to several elements that were part of this agreement, the strategically crucial Strait of Hormuz would also be fully opened.

On Monday, US Secretary of State Marco Rubio echoed similar sentiments, noting that there was a "pretty solid" deal on the table and that the US was going to give diplomacy "every chance to succeed," before exploring the "alternatives," while speaking to reporters in New Delhi.

Meanwhile, Iran's Foreign Ministry Spokesperson Esmaeil Baqaei on Monday, said that while conclusions had been reached on many topics that were under discussion with the US, the signing of the agreement was not "imminent."

As the uncertainty continues, the Strait of Hormuz, which accounted for one-fifth of global LNG flows, remained effectively closed for the 13th week running, despite seeing a major uptick in traffic, with 33 vessels transiting over the past 24 hours, according to the Hormuz Strait Monitor.

This, however, is still significantly below the typical daily average of 138 vessels that sailed through the Strait before the conflict.

According to Daniel Hynes, a senior commodity strategist at ANZ, recent developments have led to a pullback in European gas prices, since the region's "restocking requirements are less critical than those in Asia."

This was despite inventory levels being depleted, at just 37.83% of capacity, compared to 45.69% during the corresponding period a year ago, according to Gas Infrastructure Europe.

Inventory levels were also significantly below the five-year average for this period, at 51.9%, according to data from the Swiss Federal Office of Energy.

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