European Gas Markets Seek Direction After US-Iran Jolt

Key Moments

Dutch TTF futures fell to a two-month low before stabilizing, following the preliminary US-Iran peace framework.
European gas prices remain about 10% above the same period last year and nearly 30% higher than before the late-February US-Iran conflict.
Technical signals point to short-term volatility, with key price levels clustered between $40.00 and $45.90.

Market Reaction to the US-Iran Preliminary Peace Framework

Dutch natural gas futures have stabilized after a sharp sell-off earlier in the week that drove European benchmark prices to their lowest level in nearly two months. The initial decline came as traders reacted to a preliminary peace framework between the US and Iran, which eased concerns over sustained energy supply disruptions.

Even with the recent pullback, European natural gas prices are still trading well above pre-conflict levels. Prices are currently about 10% higher than during the comparable period last year and are close to 30% above levels seen before the outbreak of the US-Iran war in late February.

Supply Disruptions and Path to Normalization

The initial conflict led to the closure of the Strait of Hormuz, a critical chokepoint for global LNG flows. The disruption cut off about 20% of global LNG supply, as Qatar was unable to ship cargoes to European and Asian buyers. Importers turned to alternative supplies from Australia and the US, contributing to a price spike that pushed European gas benchmarks to levels last seen in January 2023 at the height of the war.

While the preliminary peace understanding has eased fears of protracted supply disruption, the normalization process is expected to be gradual. Tankers that were trapped during the closure and associated administrative backlogs will take time to clear. This includes multiple empty LNG vessels currently idle in Asia that would ordinarily be sailing to Qatar’s Ras Laffan Industrial City, one of the world’s key LNG production hubs.

The liquefaction process itself also acts as a bottleneck, given that natural gas must be slowly cooled to around -162 degrees celsius before it can be shipped as LNG. These logistical and processing factors are likely to contribute to continued price swings in the near term.

Investors are expected to monitor developments around the US-Iran peace framework closely as they await finalization and formal ratification, which could further influence sentiment and price direction.

European Storage Needs and Demand Outlook

European gas demand is anticipated to remain firm as countries work to rebuild storage levels. Earlier disruptions at the Strait of Hormuz and the associated price surge made it challenging for European nations to maintain healthy reserves, which were already below normal at the start of the year.

This combination of ongoing restocking needs and lingering supply-chain frictions suggests that market volatility is likely to persist in the short term, even as outright panic over supply disruption has eased compared to the peak of the conflict.

Technical Picture: Dutch TTF Futures

European natural gas prices, as reflected in Dutch TTF futures, steadied in early Tuesday trading after the sharp decline at the beginning of the week. In the previous session, the contract fell to its lowest level in almost two months following the announcement of the preliminary US-Iran framework. Prices have since found support near Monday’s intraday low.

Daily chart indicators highlight a volatile backdrop with a bearish tilt. The contract is currently trading below both the short-term 25-day exponential moving average (EMA) and the medium-term 50-day EMA, underscoring ongoing downside pressure. At the same time, the relative strength index (RSI) stands at 36, signaling scope for modest upside corrections even within a broader bearish structure.

Key Technical Levels

In the near term, price action is expected to remain range-bound within a relatively tight band, with defined support and resistance levels guiding trading behavior.

Technical Indicator / Level	Current Signal
25-day EMA	Price trading below – bearish bias
50-day EMA	Price trading below – medium-term pressure
RSI	36 – suggests potential for subtle gains
Immediate support	$41.15
Near-term resistance	$44.50
Upside cap amid volatility	$45.90
Lower downside trigger	$40.00

In the short run, support is likely to emerge near $41.15, while resistance around $44.50 may keep prices confined to a trading range. Any further upside attempts could encounter additional resistance near $45.90. Conversely, a break below current support could open the way toward the lower threshold at $40.00, which would challenge and potentially invalidate the current range-bound thesis.