Key facts
- European natural gas prices rose 5% to over 70 euros/MWh, the highest since January 2023.
- Middle East tensions impacting LNG supply are driving up prices in Europe and Asia.
- Europe is heading into winter with gas storage levels at a two-decade low, around 63% full.
- QatarEnergy extended force majeure on LNG deliveries due to blocked transits through the Strait of Hormuz.
- Asian spot LNG prices reached a five-month high as buyers seek alternative supplies.
- The Netherlands has indicated it will miss its gas storage target.
European natural gas prices have surged 5% to over 70 euros per megawatt-hour, reaching their highest level since January 2023. This sharp increase is attributed to Middle East tensions impacting LNG supply, particularly from Qatar, and a fierce competition for available global cargoes ahead of winter. Asia's spot LNG prices also hit a five-month high as buyers compete for cargoes amid ongoing disruptions through the Strait of Hormuz.
Europe is heading into the colder months with gas storage levels at a two-decade low, approximately 63% full, which is below the five-year average and raises concerns about meeting winter demand. The Netherlands has indicated it will miss its gas storage target.
The ongoing conflict in the Middle East and the extended force majeure on Qatari LNG deliveries are forcing Europe to scramble for supply amid high prices and intense competition from Asia. Utilities in South Korea, India, Taiwan, and Bangladesh are actively seeking spot LNG cargoes for October and November to replace disrupted term supplies.