European natural gas prices moved higher on Tuesday as market participants weighed uncertainty over potential renewed talks between the U.S. and Iran aimed at extending a temporary ceasefire.
By 09:23 ET (13:23 GMT), the Dutch front-month contract at the TTF hub - the benchmark for European gas - had risen 3.5% to 41.65 euros per megawatt hour (MWh), according to data from the Intercontinental Exchange.
Benchmark EU natural gas prices remain substantially above pre-war levels. Contributing to the constrained supply backdrop has been the effective closure of the Strait of Hormuz and a string of attacks on key energy infrastructure, notably production facilities in Qatar. Those disruptions have been a factor in elevated global gas prices.
Diplomatic developments were in flux on Tuesday as negotiators and mediators sought to clarify whether talks between Washington and Tehran could produce an agreement to extend a two-week pause to hostilities. President Donald Trump accused Tehran of violating the halt to fighting, while also suggesting that an agreement could still be achieved.
The temporary truce is scheduled to expire later this week, though the exact timing of the deadline was not uniformly specified. Citing a Pakistani source, Reuters reported that the pause would end at 8 p.m. Eastern time on Wednesday, which corresponds to midnight GMT on Thursday.
President Trump first announced the ceasefire on April 7 at 6:32 p.m. ET (22:32 GMT). On Tuesday he posted on social media that Iran had broken the truce "numerous times," without providing further detail. He subsequently told CNBC that he expects the U.S. to secure a "great deal" with Iran and described the U.S. as being in a "very strong negotiating position."
With the ceasefire countdown underway, Pakistan - which has frequently acted as a mediator between Washington and Tehran - has been taking steps to facilitate renewed discussions aimed at resolving the conflict that began with joint U.S. and Israeli strikes on Iran in late February. The Associated Press, citing two regional officials, reported that both the U.S. and Iran indicated they would attend fresh negotiations in Islamabad.
Reuters reported that U.S. officials expressed confidence the talks in Pakistan will proceed, and a Pakistani source told the news agency that Tehran would be joining the discussions. Nevertheless, President Trump appeared to temper expectations for an extension to the truce, telling CNBC he does not want to renew the pause. He has emphasized that any agreement should help calm financial market volatility and include a commitment from Iran not to pursue development of a nuclear weapon.
Summary
European gas prices rose as uncertainty persisted over whether U.S.-Iran talks will extend a temporary ceasefire, against a backdrop of supply disruptions including the effective closure of the Strait of Hormuz and attacks on Qatari production facilities.
Key points
- TTF front-month gas rose 3.5% to 41.65 euros/MWh at 09:23 ET (13:23 GMT), per Intercontinental Exchange data.
- Supply pressures include the effective closure of the Strait of Hormuz and attacks on energy infrastructure, particularly in Qatar, keeping EU prices above pre-war levels.
- Diplomatic uncertainty centers on whether talks in Islamabad, facilitated by Pakistan, will produce an extension to the two-week truce ahead of its imminent expiry.
Risks and uncertainties
- The temporary ceasefire is due to expire later this week, with Reuters citing a Pakistani source that placed the deadline at 8 p.m. Eastern on Wednesday (midnight GMT Thursday), creating a tight timeline for negotiations.
- Accusations by President Trump that Iran has violated the truce add ambiguity to the prospects for an extension or a lasting agreement.
- Ongoing supply disruptions - including the effective closure of the Strait of Hormuz and attacks on production facilities in Qatar - continue to pressure global and European gas markets.
The situation remains dynamic. Market participants will be closely watching developments in Islamabad and comments from U.S. and Iranian officials for indications of whether the pause to hostilities will be extended and how that may influence energy supply risk perceptions.