-- European natural gas futures were down on Tuesday, with a second round of talks between the US and Iran set to take place in Islamabad, Pakistan, on Tuesday.
The front-month Dutch TTF benchmark was down 2.25% to 39.38 euros per megawatt hour ($46.33), while UK NBP futures dropped 2.42% to 98.86 British pence per therm ($1.33).
US Vice President JD Vance is headed to Pakistan, leading the US delegation, while Iran's Supreme Leader, Mojtaba Khamenei, has authorized the country's negotiators to participate in the second round of talks, according to multiple media outlets.
However, uncertainties persist, with US President Donald Trump saying in a phone interview with Bloomberg that he was "highly unlikely" to extend the two-week ceasefire, which he said was set to expire on Wednesday evening.
The Strait of Hormuz remained effectively closed for the eighth week running, but saw an uptick in traffic, with 16 vessels passing through over the past 24 hours, according to the Hormuz Strait Monitor.
This is still significantly below the typical daily average of 138 ships transiting the Strait, as the UK's Joint Maritime Information Center continues to maintain the regional threat level at "Critical."
According to Cyril Widdershoven, a geopolitical strategist with a focus on commodities, diplomacy in the Strait "is becoming theatre," as he noted that power in Iran was no longer controlled by the State, but by the Islamic Revolutionary Guard Corps, which is now acting like a parallel authority.
"Any deal that ignores this fragmentation risks immediate irrelevance," he said, adding that shipping companies, energy markets, and insurers are already seeing this.
This comes at a critical juncture for European markets, with the region's gas storage at its lowest level in years, at 30.40%, compared to 36.74% during the corresponding period a year ago, according to Gas Infrastructure Europe.
Meanwhile, the Golden Pass LNG export facility in Texas has reported the arrival of its first tanker to load its inaugural cargo of super-chilled natural gas. This offers relief for markets that have been reeling from supply constraints.