European natural gas prices have climbed to their highest level since early 2023, as a prolonged collapse in Persian Gulf LNG exports collides with below-average storage just as the heating season begins.
Dutch TTF front-month futures, the European benchmark, traded near €87 per megawatt-hour this week, according to Trading Economics data, up more than 3% on the day and roughly double the €48-49 level the contract traded at as recently as early June. Other trackers put the front-month price a few euros lower, in the low-to-mid €80s, but all agree the direction: gas has not traded this high since the energy crisis years of 2022-23.
A Gulf shortfall meets thin storage
The driver is supply, not demand. Persian Gulf LNG export volumes remain at only an estimated 15% to 25% of pre-war levels, Goldman Sachs analysts said in a note, as the extended standoff around the Strait of Hormuz continues to disrupt loadings from the region's terminals. Europe, which built much of its post-2022 energy security around substituting Russian pipeline gas with LNG cargoes, is now competing directly with buyers in Asia for a shrunken pool of available shipments.
That is landing on a continent that entered autumn with less of a buffer than usual. EU gas storage stood at about 73.1% of capacity in early October, according to CNBC's reporting on the storage data, roughly 16 to 17 percentage points below the seasonal norm of around 90% that European utilities typically target before winter.
Goldman now forecasts a fourth-quarter average TTF price of around €70 per megawatt-hour, up sharply from the €53 it was projecting as recently as September, and the bank has warned of upside risk toward €105 if the Gulf disruption persists through a normal or colder-than-normal winter. The logic, the bank argues, is that European prices may simply need to rise far enough to price out industrial demand and draw in marginal LNG cargoes that would otherwise go elsewhere.
Not every desk agrees
Not every forecaster is as bearish on supply. Citi has kept a fourth-quarter TTF estimate of around €56 per megawatt-hour, according to reporting on the diverging bank forecasts, well below where the market is currently pricing risk — a reminder that forecasts this far into an unresolved geopolitical disruption carry unusually wide error bars.
For European households and industry, the practical effect is a repeat of a now-familiar pattern: utilities and heavy gas users face another winter of elevated input costs just as some had hoped the post-2022 crisis was fully behind them. Energy-intensive manufacturers, from chemicals to fertilizer production, are likely to face the sharpest pressure on margins if prices push toward the upper end of Goldman's range.
The next major test comes with the first sustained cold snap of the season. Traders are watching weather forecasts for northern Europe as closely as they are watching diplomatic efforts around Hormuz, since either a resolution that restores Gulf LNG flows or a harsh winter that draws down storage faster than usual could move prices sharply in either direction within weeks.