European natural gas prices dropped sharply on Wednesday, losing 18% at the opening of trading after news of a two-week ceasefire between the United States and Iran, according to data from the ICE exchange cited by TASS.

The price of May futures contracts at the Dutch TTF hub fell to around $518 per 1,000 cubic meters, or €42.905 per MWh on the European exchange, TASS reported.

Market impact and forecast

The price drop followed Tuesday's announcement by US President Donald Trump of a two-week ceasefire with Iran, agreed on the basis of a proposal by Pakistani Prime Minister Shehbaz Sharif and conditional on Tehran's readiness to fully and immediately open the Strait of Hormuz to navigation, the US leader said.

According to Iranian state television, Tehran set out ten conditions for the ceasefire, which Washington accepted. Among them were the principle of non-aggression, Iranian control over the Strait of Hormuz, uranium enrichment inside the Islamic Republic, the removal of primary and secondary sanctions, compensation payments, and the withdrawal of US forces from the region.

The talks will continue on April 10 in Islamabad, where the Pakistani prime minister invited the US and Iranian delegations, and the US delegation will include Vice President JD Vance, special envoy Steve Witkoff, and Jared Kushner, CNN reported.

Analysts caution that the market is yet far from a full recovery. "In our view, a full return to normal is unlikely in the coming months even if the US and Iran negotiations succeed," said Finam analyst Sergey Kaufman, who pointed to the time necessary to restart Qatar's LNG production facilities, at least a couple of weeks, and the fact that 17% of the plant's capacities are under repair.

Prices are supported by low gas inventories in Europe, currently below 29%, and among the factors limiting growth, the analyst cited higher US LNG production and a partial demand decline in Asia-Pacific countries as some consumers switch back to coal because of gas shortages.

"Against this backdrop, we believe that if the talks succeed, gas prices in the EU may fall to $430-460 per 1,000 cubic meters. At the same time, it is important to stress that it is impossible to predict the outcome of the negotiations involving President Trump," he added.

Ceasefire conditions

The talks in the Pakistani capital were preceded by Iran's stated commitment to fully open the Strait of Hormuz. The ceasefire terms, as reported by Iranian media, also show Tehran's position of strength in the negotiations—they included the requirement for compensation payments and a complete drawdown of US military assets from the region.