Investing.com – European natural gas prices dropped on Tuesday after the Wall Street Journal reported that President Donald Trump has told aides that he is considering ending the war in Iran without having largely reopened the Strait of Hormuz.
The Dutch TTF front-month contract, the European natural gas benchmark, was last down 2.3% at 53.73 euros per megawatt hour.
Trump and his aides assessed that a mission to reopen the strait would push the conflict beyond his timeline of four to six weeks, the WSJ reported, citing administration officials. Trump decided that the U.S. would wind down current hostilities with Iran after achieving its main goals of hobbling Iran’s navy and missile stocks, the WSJ said.
Washington will then pressure Tehran diplomatically to reopen the strait, failing which, it will press allies in Europe and the Gulf to take the lead on reopening the strait, the WSJ reported.
The Strait of Hormuz has become a key point of focus for the U.S.-Israel war on Iran, with Tehran having effectively blocked the passage with mines and missile strikes. Roughly a one-fifth of the world’s oil flows through the narrow waterway off of Iran’s southern coast.
Last week, Trump set an April 6 deadline for Tehran to either reopen the strait or face U.S. attacks on its key energy and water infrastructure. But Iran has largely rejected calls to unblock the strait and has attacked tankers attempting to pass through Hormuz in the past month.
The closure has sparked a sharp increase in global oil and gas prices over the past month, fueling worries over a surge in inflation in countries around the world and threatening to weigh on a host of industries.
Europe, which has come to rely on liquefied natural gas imports from the Persian Gulf following Russia’s invasion of Ukraine in 2022, has been exposed to the war. Over the past month, have soared by more than 68%.
Data on Tuesday from Eurostat showed that Eurozone inflation accelerated to 2.5% in March, below economists’ estimates but higher than the European Central Bank’s 2% medium-term target, largely due to the energy shock. In February, a time that largely does not include the now more than month-old joint U.S.-Israeli assault on Iran, consumer prices in the Eurozone currency area rose by 1.9%.