European natural gas prices have stabilized as uncertainty over US-Iran conflict prospects persists, despite cautious optimism in some markets following a US extension of the ceasefire agreement. After significant volatility in the previous trading session, benchmark futures hovered near €42 per megawatt-hour. On Tuesday, US President Trump announced he would indefinitely extend the ceasefire with Iran just before its expiration, following the breakdown of planned peace talks, while maintaining the maritime blockade of the Strait of Hormuz. With the strait effectively blocked—disrupting approximately one-fifth of global liquefied natural gas shipments—traders are closely monitoring Middle East developments. Although the majority of gas shipments through this route typically go to Asia, Europe is racing to replenish gas inventories before next winter and may face intense competition for alternative supplies in the coming months. Trump stated that the US would hold off on new strikes but continue seizing Iran-linked vessels in the Strait of Hormuz "until negotiations conclude in some form." Meanwhile, Iran indicated on Wednesday that it had received "certain signals" suggesting US willingness to lift the blockade, potentially opening a path for renewed talks between the two nations. Analysts at Deutsche Bank noted in a report: "Trump’s decision to extend the ceasefire prompted a degree of recovery in overnight trading. However, this morning’s pullback has been relatively limited." At the time of writing, the Dutch near-month futures contract, Europe’s gas benchmark, edged up 0.45% to €42.12 per megawatt-hour. The contract had risen more than 8% over the prior two trading sessions.
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