Expert analysis
Recent developments have once again highlighted that, in the short term, energy markets are driven far more by headlines and expectations than by actual fundamentals.
Yesterday, European gas, power, and oil prices dropped sharply following news of a “hypothetical” US peace plan involving Iran. The market reacted quickly, effectively pricing in an imminent ceasefire.
Today, however, that narrative is already starting to crack.
Iran confirmed it has received the proposal, but clearly stated that no negotiations are currently underway. At the same time, the United States continues to signal that a deal is close.
The result is a classic market reaction: conflicting messages leading to increased volatility and rapid repricing.
What actually matters right now?
The key takeaway is that market movements have become disconnected from fundamentals.
Prices fell as if the conflict resolution was imminent, while in reality we are, at best, still in a pre-negotiation phase.
Meanwhile, the supply shock remains largely unchanged. Around 20% of global oil and LNG flows are still affected, the situation in the Strait of Hormuz remains unresolved, and capacity at Qatar’s Ras Laffan Industrial City has not yet fully recovered.
Fundamentals therefore remain tight. European gas storage levels are around 28%, well below comfortable levels, while the injection season is about to begin. LNG availability heading into summer remains uncertain.
What are we actually seeing in the market?
Current price movements are driven far more by positioning than by fundamental changes.
The “peace narrative” triggered an unwind of previously built long positions, resulting in a sharp price drop. As reality starts to reassert itself, prices may stabilize or even rebound.
This is clearly a headline-driven market, not one that has fundamentally rebalanced.
Key takeaway: the market is pricing hope, not facts
Until we see tangible progress—actual negotiations, clear timelines, and the restart of physical flows—the downside for prices is likely to remain limited.
At the same time, upside risks remain significant.
Overall picture: the beginning of a more volatile phase
The current situation does not mark the end of the energy crisis narrative. Instead, it signals the beginning of a new, even more volatile phase.
In the coming weeks, market direction will continue to be shaped by geopolitical developments and their interpretation—while underlying fundamentals remain tight.
Source: Montel News; Reuters
Analysis written by: Tóth Eszter Lilla
26.03.2026.