European natural gas prices fell sharply in early trading after President Trump signaled he might end the Iran conflict even with the Strait of Hormuz still largely closed. The Dutch TTF front-month contract dropped 2.9% to 53.42 euros per megawatt-hour. Analysts note the decline reflects market optimism about a potential early exit rather than current supply realities.

Florence Schmit, energy strategist at Rabobank, pointed out that prices aren't reflecting actual supply disruptions that could persist even if the strait reopens. The market is trading on Trump's latest messaging about ending the conflict, viewing the situation as "a glass half full." This reaction shows how geopolitical developments continue to drive energy markets despite underlying supply concerns.

Rabobank forecasts second-quarter prices to average around 60 euros per megawatt-hour, suggesting the current dip may be temporary. The price movement highlights the volatile nature of energy markets during geopolitical tensions, where trader sentiment can quickly override fundamental supply-demand factors. European gas markets remain sensitive to developments in the Middle East, given the region's critical role in global energy flows.