European natural gas prices declined 2% to around €57.5 per MWh on Tuesday after reaching a four-month high in the previous session, as markets assessed reports of diplomatic efforts to ease tensions between the US and Iran.
Tehran said it had received a proposal from mediators for a 10-day ceasefire aimed at reviving the interim deal reached last month, offering some hope for a potential de-escalation of the conflict.
This comes as the US carried out a tenth consecutive day of strikes against Iran, while Tehran continued retaliatory attacks against neighboring countries.
Shipping through Hormuz has largely stalled and concerns over the safety of commercial vessels have continued to grow following Iranian attacks over the weekend.
The conflict has also delayed the anticipated recovery in Qatari LNG exports, making it more difficult for Europe to rebuild gas inventories ahead of winter, with storage facilities currently less than 54% full, compared with 64% at the same time last year.