Gas prices in Europe have reached a three-year high due to the crisis in the Strait of Hormuz
As winter approaches—for the first time since the 2022 energy crisis—gas prices in Europe could jump above €100, analysts warn
Photo: Mufid Majnun / unsplash
EU countries are bracing for a gas supply shortage this winter due to the conflict in the Middle East, the Financial Times reports. Earlier this week, the price of liquefied natural gas (LNG) in Europe rose to its highest level in more than three years.
Futures on the Dutch TTF hub—a key benchmark for natural gas in Europe—jumped above €68 per megawatt-hour on Tuesday, August 25, the highest level since the beginning of 2023, but then fell slightly, according to CNBC. On August 27, September contracts were trading at €65.6, and October contracts at €65.76.
A potentially cold winter, combined with ongoing restrictions on supplies from Middle Eastern countries, could cause gas prices in Europe to rise to €90–120, warns Morningstar senior analyst Tankred Fulop.
Goldman Sachs analysts also agree that natural gas futures in Europe may rise above €100 per megawatt-hour in order to sufficiently curb demand in Asia and allow Europe to maintain storage levels throughout the winter. Goldman Sachs analysts also agree. They expect such a scenario if LNG exports from the Middle East “normalize only gradually—as late as 2027.”
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