European natural gas prices dropped more than 2% to €49.1 per MWh on Friday, pulling back from a one-month high amid reports of continued US-Iran negotiations despite recent military exchanges.
A US official reaffirmed Washington's commitment to pursuing a diplomatic resolution with Tehran, easing concerns of a return to full-scale war and once again disrupt supplies from the Persian Gulf.
Prices had surged more than 12% over the previous three sessions after the US carried out new strikes on Iranian targets in response to attacks on vessels in the Strait of Hormuz.
Iran retaliated by targeting US bases in the region over the past two nights.
While President Trump declared that the ceasefire was over, he said he would not prevent talks from continuing.
Investors remain focused on energy flows through the strait, which handles around one fifth of global oil and LNG trade, as any renewed disruption could complicate Europe's efforts to replenish inventories ahead of the winter.