European Gas Contract Nears €100 as Shipments Disrupted and Winter Supplies Tighten
Key Facts
The Dutch benchmark front-month TTF natural gas contract briefly touched €100 per megawatt-hour on October 28, the first time since December 2022, according to a Reuters report. At around 13:35 GMT, the contract traded at that level, up about 4% from the previous session. The report linked the price rise to tight supplies ahead of winter, amid disruptions to liquefied natural gas shipments from the Middle East. The move came in a market struggling to replace available supplies as the high-demand season approaches. European prices are now about three times their levels before the war on Iran, the report said.
The market backdrop reflects broader disruption to LNG flows through the Strait of Hormuz, through which about 20% of global supplies passed, according to the International Energy Agency. The agency said flows had fallen to a fraction of pre-conflict levels, despite an increase in tanker transits after the temporary June agreement. Shipping disruptions through the strait had held up about 20% of global LNG exports from Qatar and the UAE, most of them bound for Asia, according to Reuters. European benchmark gas prices rose more than 150% during 2026 through October 12, the same report said. The disruption to these volumes means European and Asian buyers are competing for fewer flexible supplies.
Supply constraints are compounded by weaker storage readiness compared with previous years. Analysts and industry monitors expected European inventories to reach 75–78% of capacity by November 1, about 10 percentage points below the five-year average, according to Reuters. Inventories typically cover 25–30% of the European Union’s winter consumption, making fill levels an important factor in the seasonal supply balance. If winter is average, inventories in northwest Europe could fall to about 20% by the start of April, under a scenario reported by Reuters. A continued closure of the Strait of Hormuz could add to pressure on storage refilling in 2027.
Asian competition is reflected in price movements and regional spreads. In the second quarter of 2026, the average TTF price rose 32% year on year to about $16 per million British thermal units, while the average Asian spot LNG price increased 45% to $17.5, according to the International Energy Agency. The price spread between the two regions reversed during the year: Europe commanded a premium of $0.9 per million British thermal units in January and February, before Asia moved to an average premium of $2.1 from March to June. This encouraged flexible LNG cargoes to be diverted from Europe to Asia. The front-month TTF contract also rose more than 11% between October 7 and 14, reaching its highest level in more than three years, according to Kpler. The company attributed part of the price support to Asian buyers competing for flexible cargoes.
Supply pressures extend to Europe’s future options, as the European Union’s full ban on Russian LNG imports begins in January 2027, according to a Reuters estimate, adding another factor to a tightening market. In its October 15 report, Kpler expected TTF prices to remain broadly stable over the following week, but cited upside risks including disruptions to Norwegian supplies, continued geopolitical tensions and competition from Asian buyers. More broadly across energy markets, the Associated Press said European Union countries had spent more than an additional €100 billion on energy imports since the outbreak of the war with Iran through September 29. The agency said seven oil tankers were set ablaze or damaged in the Strait of Hormuz in a single night, according to an announcement by Tehran, while noting it had not independently verified the claim. Oil tankers continued to transit under U.S. military protection despite an increase in attacks, the agency said, adding that a return to full-scale fighting could complicate shipments of oil, gas and other products from the region.