European natural gas prices exceed 100 euros per megawatt-hour amid Middle East tension

Natural gas prices in Europe exceeded 100 euros per megawatt-hour, reaching their highest level since December 2022, driven by Middle East tensions disrupting global liquefied natural gas (LNG) shipments and strong demand originating from Asia. At the Netherlands-based TTF, the price of natural gas for November delivery approached 101 euros per megawatt-hour during the day.

The surge in natural gas prices, which were trading below 70 euros at the beginning of September, was driven by a significant decline in Qatar's LNG shipments due to the de facto blockade in the Strait of Hormuz. Qatar, which supplies about one-fifth of global LNG supply, saw its shipments drop to a quarter of their pre-war levels. Analysts noted that prices exceeding 100 euros could bring government interventions to the agenda and negatively affect winter supply expectations.

It was reported that Asian importers turned to the spot market to avoid potential supply disruptions, and China made purchases at high prices in line with its natural gas storage targets. If winter temperatures drop extremely and wind speeds remain low, prices are projected to rise up to 130 euros per megawatt-hour early next year.