Due to the ceasefire in the Middle East: gas prices in Europe are falling
8 April 16:17
Wholesale gas prices in the Netherlands and the UK plummeted on Wednesday, April 8, after the U.S. and Iran agreed to a two-week ceasefire on the condition that Tehran suspend its blockade of oil and gas shipments through the Strait of Hormuz.
This was reported by "Komersant Ukrainian", citing Reuters.
Iranian Foreign Minister Abbas Arakchi said on Wednesday that Iran would stop shelling neighboring countries if strikes on its territory ceased, and that safe navigation through the Strait of Hormuz would be possible during these two weeks in coordination with the Iranian armed forces.
Front-month gas futures on the Dutch TTF hub fell 15.68% to 44.1 euros per megawatt-hour by 11:21 Kyiv time, hitting a one-month low during the session.
The British contract for next month’s delivery fell by 15.86% to 110.8 pence per therm.
It remains unclear exactly when the ceasefire will take effect: U.S. President Donald Trump said it depends on Iran’s agreement to reopen the Strait of Hormuz.
According to Kpler, gas carriers carrying 1.3 million metric tons of LNG are currently waiting at the entrance to the strait.
“The market will assess how many LNG shipments will be able to pass through the strait after the truce takes effect, but it is unlikely that all the stranded vessels will manage to pass through within two weeks,” noted a gas market trader.
Trump said that Iran had submitted its 10-point draft agreement and called it acceptable as a basis for negotiations. The U.S. president hopes for a final settlement within these two weeks.
“According to reports, the IRI proposal allows Iran and Oman to collect transit fees from ships passing through the strait,” ING analysts wrote.
Two-week truce between the US and Iran
As a reminder, US President Donald Trump previously stated that he had agreed to a two-week truce with Iran. The plan is to finalize the agreement during this period.
He explained that the reason for the agreement is that the U.S. has already “fulfilled and exceeded all military objectives” and has moved toward a final agreement on long-term peace with Iran and peace in the Middle East.
The U.S. president also made it clear that Washington will play its part in the Strait of Hormuz.
In his words, “there will be many positive developments and a lot of money will be made.”
