European natural gas prices fell 2% to around €57.5 per MWh on Tuesday, easing from a four-month high hit in the previous session, as markets weighed reports of mediation efforts to reduce tensions between the US and Iran. Tehran confirmed it had received a proposal from mediators for a 10-day ceasefire designed to revive last month’s interim agreement, raising hopes for a potential de-escalation of the conflict.
The diplomatic push comes as the US has carried out air strikes against Iran for a tenth consecutive day, while Tehran has continued retaliatory attacks on neighboring countries. Shipping through the Strait of Hormuz has been largely disrupted, and concerns over the safety of commercial vessels have intensified following Iranian attacks over the weekend.
The conflict has also hindered the expected recovery in Qatari LNG exports, complicating Europe’s efforts to rebuild gas inventories ahead of the winter heating season. Storage sites in Europe are currently less than 54% full, compared with about 64% at the same time last year.
