European Gas Contract Touches €100 for First Time Since December 2022
Key Facts
The benchmark European natural gas contract touched €100 per megawatt-hour on Wednesday, October 28, for the first time since December 2022, Reuters reported. Breaching that threshold puts Europe’s energy market back at the forefront of concerns as winter approaches, with the continent entering the season with inventories below their usual average. Supply pressure is linked to disrupted shipping through the Strait of Hormuz, which has trapped exports from Qatar and the UAE and intensified competition for spot cargoes. Reuters said most of the affected exports were headed to Asia, putting Europe in competition with Asian buyers for available supplies. The price reaching this level does not reflect a single factor; storage levels and competition among markets for liquefied natural gas are also at play.
Analysts and traders expect European gas inventories to reach 75–78% of capacity by November 1, about 10 percentage points below the five-year average, Reuters reported. The estimate follows a report by the EU Agency for the Cooperation of Energy Regulators that inventories stood at 75% on October 21. Reuters had described the 70% level on September 17, as winter set in, as a record low at the time. These readings put the question of replenishing inventories at the center of market attention, as the cold season begins with reserves below average. The previous draft also attributed the pressure to forecasts of cold weather, but no specific forecast of this kind is available in the documented facts.
On global supply, Reuters said disruptions to shipping through the Strait of Hormuz had trapped about 20% of global liquefied natural gas exports from Qatar and the UAE. The International Energy Agency estimated that flows disrupted through the strait had accounted for about 20% of global LNG supply before the disruption, and that their interruption caused sharp price volatility. The route’s importance is evident in that cargoes that could have headed to Europe have become part of wider competition for available supplies. In Asia, the average spot price for LNG rose 45% year on year to $17.5 per million British thermal units between March and June, the agency said. The agency said higher Asian prices encouraged flexible cargoes to be diverted from Europe to Asia, intensifying competition between the two regions.
European prices had already been under pressure before the latest jump: the average TTF price in the second quarter of 2026 rose 32% year on year to about $16 per million British thermal units, according to an International Energy Agency report released in July. This reading provides context for the market’s trajectory before the contract reached €100 in October, while storage data available during September and October showed reserves below the five-year average. The agency described disrupted LNG flows through Hormuz as a source of sharp price volatility. With competition for cargoes continuing, pressure will depend on supply availability and the pace of inventory replenishment in the coming months. These factors point to continued sensitivity in the European market to any change in LNG flows.
Reuters expects consumers to feel the full impact of higher wholesale gas prices during 2027, because retail contracts are typically fixed for a period before renewal. As for inventories, Northwest European reserves could fall to about 20% of capacity by early April 2027 even with average winter weather, the agency said. An analyst quoted by Reuters estimated that continued disruption in the Strait of Hormuz could add to pressure on replenishing inventories in 2027. The EU’s full ban on Russian LNG imports, which begins in January 2027, will further tighten supplies. These developments put inventory levels, LNG supplies and the timing of consumer contract renewals among the market’s key factors to watch.