Natural gas prices across Europe fell sharply on Tuesday, dropping 16% to around €47 per megawatt-hour after spiking to a three-year high above €69/MWh the previous day. The retreat came on the back of Trump's comments that the war with Iran would end soon and that the US military campaign was moving considerably faster than originally planned. It marks the steepest single-day decline since 2023.

Oil prices mirrored the move, pulling back toward $90 per barrel after briefly surging past USD 119.50 - themselves multi-year highs. Trump added that he intends to ease oil-related sanctions, particularly those targeting Russia, and that the US Navy would begin escorting tankers through the Strait of Hormuz to help bring fuel costs under control.

The Strait, through which roughly a fifth of global liquefied natural gas flows, predominantly from Qatar's massive export terminal, the largest in the world, has been effectively shut since last week. Despite repeated Iranian assurances that the route remains open, tanker traffic through the passage has largely ground to a halt since the conflict began. Analysts have flagged that a sustained halt in Qatari output could wipe out most of the LNG supply surplus that had been projected for 2026.

Hostilities in the region have not ceased, with multiple Middle Eastern countries reporting missile threats, air raid sirens, or intercepted drones on Tuesday, according to Bloomberg. Now entering its second week, the conflict has upended global energy trade and threatens to deliver the most severe shock to energy markets since Russia's invasion of Ukraine in early 2022.

The disruption carries particular weight for Europe, which has grown increasingly dependent on LNG imports having weaned itself off pipeline gas from Russia. Current EU gas storage sits at roughly 29.4% of capacity as of March 8, according to GIE data - well below the 36.6% recorded at the same point last year. With reserves unusually depleted for this time of year, large volumes of gas will need to be imported over the summer to refill storage ahead of next winter.

Several LNG tankers have already redirected toward Asian markets, where buyers heavily reliant on Gulf supplies are scrambling to secure alternatives. One energy markets analyst told Bloomberg that LNG flows will be fiercely contested for as long as instability persists in the Persian Gulf region.