Natural gas prices fall sharply on expectations of US-Iran agreement

At the Dutch TTF, Europe's most prominent natural gas trading hub, gas prices for June delivery closed at 46.92 euros per megawatt-hour yesterday. However, as of 14:11 today, prices have fallen by 12.5 percent to the 41.04 euro level.

Reports that the US administration is very close to a one-page preliminary agreement with Iran aimed at ending military conflicts in the region and opening the door to broader nuclear negotiations played a decisive role in the market decline. According to the reports, the US side expects a response from Tehran regarding this memorandum text within 48 hours.

Unnamed US officials state that while a definitive agreement has not been reached at this stage, they have reached "the closest point of consensus since the beginning of the conflict." It is stated that the draft memorandum aims to initiate a 30-day negotiation process for a more comprehensive agreement that would include topics such as halting hostilities, reopening the Strait of Hormuz, placing limitations on Iran's nuclear program, and lifting US sanctions.

While it is reported that the talks could be held in Pakistan's capital, Islamabad, or in Geneva, Switzerland, it is stated that the gradual lifting of restrictions imposed by Iran on ship traffic in the Strait of Hormuz and the US naval blockade are on the agenda for the 30-day period.

Experts emphasize that reducing tension in the critical Strait of Hormuz, through which approximately 20 percent of global LNG supply passes, is of great importance, especially for Europe to fill its gas storage facilities before the winter season.

News Source: 12punto