European Gas Holds Near Four-Month Highs Amid Middle East Supply Concerns

Dutch TTF front-month natural gas traded around €59.3/MWh on Tuesday, while UK NBP gas rose 1.3% to 143.30 pence per therm, remaining near their highest levels since late March, according to Investing.com.

Factors Supporting Current Prices

Gas prices remained elevated despite reports of diplomatic contacts between the United States and Iran, as markets continued to monitor multiple maritime security risks.

Key developments include:

1. Yemen's Houthi movement announced a naval blockade targeting Saudi Arabia following recent incidents involving commercial shipping near the Strait of Hormuz.
2. The Strait of Hormuz handles around 20% of global LNG trade, much of it from Qatar, meaning disruptions could affect LNG shipments to Europe.

According to IEEFA, a missile strike on Qatar's Ras Laffan LNG complex in March 2026 reduced part of the country's LNG export capacity, contributing to Europe's increased reliance on LNG imports from the United States. IEEFA estimates the U.S. could account for around two-thirds of Europe's LNG imports this year.

European Gas Storage Levels

Europe entered the latest period of geopolitical uncertainty with gas storage at approximately 51% of capacity in early July, below the five-year seasonal average, according to ACER.

Following adjustments to the EU's mandatory storage target from 90% to 80%, current projections suggest Europe would require approximately 13% higher LNG imports than in 2025 under current assumptions to meet the revised target.

Market Outlook

Market participants will continue to monitor developments around the Strait of Hormuz, regional shipping security, and European storage levels. Further disruptions to LNG supply could continue to influence European natural gas prices and storage replenishment efforts ahead of winter.