European benchmark prices tumbled 20% at opening in Amsterdam on Wednesday after the U.S. and Iran announced a two-week ceasefire that could lead to reopening of the Strait of Hormuz.
The front-month contract of the Dutch TTF Natural Gas Futures, the European benchmark for gas trading, opened 20% lower on Wednesday and traded 16% lower in the late morning in Europe.
The May 2026 contract slumped to $51.45 (44 euros) per megawatt-hour (MWh), down from $62 (53 euros) per MWh on Tuesday.
Europe’s gas prices jumped by about 60% between February 28, the day on which the U.S. and Israel started bombing Iran, and April 7, just before the ceasefire was announced.
On April 8, the market tentatively hopes that a potential re-opening of the Strait of Hormuz could allow LNG tankers to finally transit the critical chokepoint for energy trade and ease the gas supply crunch of the recent weeks.
No LNG cargo has transited the Strait of Hormuz in over a month, as two vessels carrying Qatari LNG were forced to abandon an attempt to exit the Strait of Hormuz in what would have been the first export of Qatari LNG since the war began.
Despite the evident market relief with commodities prices slumping and equities rallying after the ceasefire announcement, the physical supply tightness in the LNG market is set to continue.
Qatar’s LNG is not only trapped in the Strait of Hormuz, for now, but its key liquefaction complex Ras Laffan, the world’s largest, sustained extensive damage in an Iranian missile strike in the middle of March.
The strikes and damage have forced Qatar to shut in production and repairs could take up to five years to complete.
“Infrastructure damage inflicted during the six-week conflict cannot be quickly reversed,” Fabien Yip, market analyst at IG Bank, said in a note on Wednesday.
“The disruption to supply will weigh on energy prices well beyond any ceasefire window,” the analyst noted.
